Claims Management and Substantiation in The United Arab Emirates Construction Sector

Claims Management and Substantiation in the
United Arab Emirates Construction Sector

By
Nael Maher Zubaida
Student ID: 110159
Dissertation submitted in partial fulfilment of the requirements for the

degree of MSc Project Management
Faculty of Business
Dissertation Supervisor
Dr. Arun Bajracharya
May-2012
MSc Project Management
Dissertation
ID: 110159
DISSERTATION RELEASE FORM

Student Name
Student ID
Programme
Date
NAEL MAHER ZUBAIDA
110159
5 June 2012
Title :Claims Management and Substantiation in the United Arab Emirates Construction Sector
I warrant that the content of this dissertation is the direct result of my own work and that any
use made in it of published or unpublished copyright material falls within the limits permitted
by international copyright conventions.
I understand that one copy of my dissertation will be deposited in the University Library for
permanent retention.
I hereby agree that the material mentioned above for which I am author and copyright holder
may be copied and distributed by The British University in Dubai for the purposes of
research, private study or education and that The British University in Dubai may recover
from purchasers the costs incurred in such copying and distribution, where appropriate.
I understand that The British University in Dubai may make that copy available in digital
format if appropriate.
I understand that I may apply to the University to retain the right to withhold or to restrict
access to my dissertation for a period which shall not normally exceed four calendar years
from the congregation at which the degree is conferred, the length of the period to be
specified in the application, together with the precise reasons for making that application.
Signature

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ID: 110159
Abstract
Many construction companies operating in the United Arab Emirates face a number of
constraints which negatively affect the execution of projects. Such constraints have a
direct effect on the cost and time factors of the project. Independent of the constraints
perceived, the difficulties in completing projects in a timely manner lead contractors
to formulate claims in an effort to maintain their contractual rights and in an attempt
to avoid penalties specified in the contracts. This dissertation aimed at developing a
claims management system which can be applied by contractors to ensure that their
claims were substantiated adequately. To gain a better understanding of claims, types
of claims and substantiation were all factors which were reviewed in an attempt to
enable contractors to further grasp the knowledge required to establish a wellstructured claims management system. This was achieved through developing a
conceptual framework which contained all the concepts claims management revolved
around. The study was of qualitative nature and the tools used were based on semistructured interviews and case study approach. The construction company which was
referred to as part of the analysis was called ABC. Interviews were held with
professionals working in construction organizations and who were directly involved in
the claims which surfaced in their projects. The study provided in the conclusion the
necessary elements which construction firms need to take into consideration when
formulating their claims. The managerial aspect was the focus of the study rather than
the legal aspect. Some of the findings revealed in this dissertation were the importance
of records keeping, formal notifications and significance of change and change orders
in the context of claims management and other key aspects relevant to the field of
claims management and substantiation.
Keywords: Claims, management, substantiation, United Arab Emirates, contractors,

legal, managerial, qualitative, formulating, change orders
ID: 110159
Dissertation
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Acknowledgements
First and foremost, praise and thanks be to God without whose graciousness and
abundant blessings, I could not have been able to undertake this task. I tender my
sincere appreciation to my supervisor Dr. Arun Bajracharya for his constant
guidance, monitoring and support throughout my work on the dissertation. My deepest
thanks to the professors in the department for the valuable knowledge they gave me
and the effort they expended on me to move me forward on my scholastic journey.
My gratitude is further extended to my employer for their constant support and
understanding through the duration of my studies at the British University of Dubai,
particularly in light of the difficulties during the current economic recession. The
years of experience gained under them provided me with valuable insight into the
workings of project management and helped me greatly with a good deal of the
research I conducted during the course of my postgraduate studies.

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Dedication
I dedicate my work to all those who have stood beside me and they are
My Parents Dr. Maher Zubaida and Dr. Mary Zubaida
Who have been a source of motivation and inspiration over the years.
My beloved wife Amal...
For her constant moral support, love and encouragement during my studies at the
British University in Dubai. I couldnt have made it without her.
And my precious daughter Lama...
Whose joy and laughter lightened my burden immeasurably when the going got tough!
My supervisor Dr. Arun Bajracharya
For being, in addition, my mentor and friend during my journey in BUID and to
whose endless patience and advice I credit the success with which I was able to
negotiate the rocky path of a novice researcher.
My Friends
I would also like to dedicate my work to my friends for just being there for me
whenever I needed to unwind.
Nael Maher Zubaida

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Table of Contents
Abstract .................................................................................................................. 2
Acknowledgements .................................................................................................. 4
Dedication ............................................................................................................... 5
List of Figures ......................................................................................................... 9
List of Tables ......................................................................................................... 10
Abbreviations ........................................................................................................ 11
CHAPTER ONEINTRODUCTION ...................................................................... 12
1.1Background ..................................................................................................... 12
1.2 Statement of the Problem .................................................................................. 14
1.3 Aim and Objectives .......................................................................................... 15
1.4 Scope of the Research ....................................................................................... 16
1.5 Research Questions .......................................................................................... 18
1.6 Research Structure ........................................................................................... 19
CHAPTER TWO LITERATURE REVIEW ......................................................... 20

2.1 Introduction .................................................................................................... 20
2.2 Definition of Claims .......................................................................................... 20
2.3 Types of Claims ............................................................................................... 21
2.3.1 Extension of Time (EOT) Claims ........................................................................ 22
2.3.2 Prolongation Claims ....................................................................................... 27
2.3.3 Acceleration Claims ....................................................................................... 28
2.4 Causes and effects of Claims in construction ......................................................... 30

2.5 Claims Management ......................................................................................... 32
2.6 FIDIC Views on Claims ..................................................................................... 36
2.7 Delay Analysis Methods .................................................................................... 37
2.8 Change and Change orders ................................................................................ 40
2.9 Records and Documentation .............................................................................. 43

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2.10 Contract Administration .................................................................................. 46

2.11The Role of the Engineer in claims assessment and evaluation ................................. 47
CHAPTER THREE THE CONCEPTUAL FRAMEWORK ................................... 49

3.1 Introduction .................................................................................................... 49
3.2 Claims Management Conceptual Framework ........................................................ 49
3.3 Current Claims Management Practices ................................................................ 51
3.4 Critical Success Factors for Claims Management ................................................... 53
3.5 Chapter Summary............................................................................................ 56
CHAPTER FOUR METHODOLOGY .................................................................. 58

4.1 Introduction .................................................................................................... 58
4.2 Research Approach .......................................................................................... 59
4.3 Case Study Research ........................................................................................ 60
4.4 The Interviews Structure ................................................................................... 61
4.5 The Data Collection .......................................................................................... 62
4.6 Validity and Reliability ..................................................................................... 64
CHAPTER FIVEDATA ANALYSIS, RESULTS AND FINDINGS .......................... 65

5.1 Introduction .................................................................................................... 65
5.2 ABC Construction Company .............................................................................. 66
5.3 Analysis- Project A ........................................................................................... 68
5.3.1 Analysis-Case 1-Interviewee 1 ........................................................................... 71
5.3.2 Analysis-Case 1-Interviewee 2 ........................................................................... 75
5.3.3 Identified Similarities and Differences
................................................................. 78
5.4 Analysis- Project B ........................................................................................... 79
.......................................................................... 81
5.4.2 Analysis-Case 2- Interviewee 2 .......................................................................... 84
5.4.3 Identified Similarities and Differences ................................................................. 86
5.4.1 Analysis-Case 2- Interviewee 1
5.5 Analysis- Project C ........................................................................................... 87

5.5.1 Analysis-Case 3 Interviewee 1.......................................................................... 88
.......................................................................... 91

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................................................................. 93
5.6 Cross Case Analysis .......................................................................................... 94
..................................................................................... 94
5.6.2 Identified Differences ..................................................................................... 95
5.6.1 Identified Similarities
5.7 Chapter Summary............................................................................................ 96
CHAPTER SIX CONCLUSIONS AND RECOMMENDATIONS ......................... 104

6.1 Conclusions................................................................................................... 104
6.2 Recommendations .......................................................................................... 105
6.3 Limitations of the Study .................................................................................. 106
6.4 Recommendations for Future Research .............................................................. 107
REFERENCES .................................................................................................... 108

APPENDICES ..................................................................................................... 115
APPENDIX (A) Student Declaration Form .............................................................. 115
APPENDIX (B) THE INTERVIEW QUESTIONS STRUCTURE ............................. 115
APPENDIX (C) Project A Organization Chart
........................................................ 119
APPENDIX (D) Project B Organization Chart ......................................................... 120

APPENDIX (E) Project C Organization Chart ......................................................... 121

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List of Figures
Figure 1-1 The owner, architect, and contractor triangle ............................................. 17
Figure 2-1 EOT Claims Formulation .............................................................. 23
Figure 2-2 A basic data flow diagram for contractor side estimation of time extension
claims .......25
Figure 2-3 Causes of Claims.........................................................................................30
Figure 2-4 Claims Management Lifecycle...................................................................33
Figure 2-5 Types of Delays and Concurrency .............................................................34
Figure 2-6 Causes of Delay .........................................................................................38
Figure 2-7 Delay Analysis Procedures ........39
Figure 2-8 Proper and Improper Records Management ..............................................45
Figure 2-9 General Sequence of Claims Procedure Under the Red Book....................47
Figure 2-10 Construction Dispute Resolution Steps .......48
Figure 3-1 Concepts Reviewed in the Research of Claims Management .................... 50
Figure 4-1 The Contractual Framework of Claims Management (The Idealistic View
Model)....................................................................................................... 57
Figure 5-1 The Analysis Procedures............................................................................67

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List of Tables
-
Table 1-1 The Projects and Contract Types17
Table 2-1 The FIDIC Clauses relevant to Claims...36
Table 2-2 Ranking the cause of claims and the frequency..41
- Table 4-1 Table of the Interviewees62

- Table 4-2 The Documents retrieved from ABC projects....63
-
Table 5-1 ABC targeted projects 65
Table 5-2 Project A features68
Table 5-3 Project A General Information feedback78
Table 5-4 Project B Features...79
Table 5-5 Summary of Claims Management Elements..97
Table 5-6 The Role of the Engineer and FIDIC..98
Table 5-7 The Aspects of Record Keeping 98
Table 5-8 Identified Change and Change Management Elements.99
Table 5-9 Summary of Lessons Learnt.100
Table 5-10 Critical Success Factors versus Literature versus Interviewees

Feedback101
Table 5-11 Critical Failure Factors versus Literature versus Interviewees

Feedback....102

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Abbreviations
ADR
Alternative Dispute Resolution
AED
Arab Emirates Dirham
CFF
Critical Failure Factors
CHP
Claim Handling Process
CMS
Claims Management System
CFF
Critical Failure Factors
CSF
Critical Success Factors
EOT
Extension of time
FIDIC
Fdration Internationale Des Ingnieurs-Conseils
FTP
File Transfer Path
LD
Liquidated Damages
MENA
Middle East and North Africa
PMI
Project Management Institute
UAE
United Arab Emirates

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CHAPTER ONEINTRODUCTION
1.1 Background
In the most recent years, the United Arab Emirates construction industry has
witnessed remarkable progress. The demand for housing, infra-structure and
entertainment projects lead to the appearance of mega projects which were complex
and of great value. With this complexity came the need for fast tracking which
usually results in rework, change orders and site modifications (Moazzami et al.,
2011).Accordingly, there was a need to have proper contracts put forward to allocate
the risk between the owner, the contractor, and the designer (Arditi and Patel, 1989).
The majority of construction projects comprise of binding agreements or
contracts that are drawn up for the sake of minimizing conflicts and disputes at the
execution level or post completion of these projects. These contracts are usually
signed between the two main parties: an Employer or Owner and a Contractor who
undertakes the execution of that particular project. Such a contract includes general
clauses and specific clauses which govern the relationship between the Employer and
the Contractor.
In the United Arab Emirates, FIDIC (International Federation of Consulting
Engineers) is the known form of contract used to administer construction contracts.
Many of the clauses included in construction contracts are directly extracted from
FIDIC which Employers greatly rely on in the UAE. FIDIC acknowledges an
additional involved party which is known as the Engineer. The Engineers essential
role is to administer the contract impartially between the Employer and the
Contractor. Other additional roles played by the Engineer might include the design
and supervision of the executed works.
Once the works are awarded to the Contractor via the proper form of a letter of
intent and signed contract document, the contractor engages within a duration of 14
days in providing what is defined by (FIDIC,1987) as clause 14 baseline program.
This work program is a very crucial document that is subsequently used to evaluate
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delay caused, regardless of the party responsible, and becomes the basis on which the
claim put forward by the contractor against the client or vice versa is substantiated.
The process involves the investigation of the reasons behind the delay whereby a
comparison is conducted between the impacted program and the baseline to
determine the amount of time the contractor might be entitled to.
At the initiation and execution phases of the project, the contractor engages in
monitoring his progress against the baseline program. Whenever a delay occurs, the
planning department signals an alert to the project manager on the occurrence of the
delay, and accordingly, a recovery plan is determined and the baseline is updated if
deemed necessary by the Contractor, in order to get the approval of the Engineer and
the Employer.
Construction claims in the United Arab Emirates are common in almost every
construction project and are direct results of the rapid growth in the construction
industry (Zaneldin, 2005). Therefore, the occurrence of claims is a commonality
perceived in many construction projects and can be attributed to a set of factors which
can cause considerable delays in a project and consequently result in a rapid increase
in that project costs.
Claims seem to be almost inevitable in mega construction projects executed
within short durations. This is because almost all construction projects are either cost
or time overrun due to many factors or reasons which can either be a breach resulting
of the Employer or the Contractor or both. Claims therefore may occur as the result
ofcost overrun, design errors and omissions, delay damages, numerous change orders,
construction rework and modifications, and overlooked work assigned to no party
(Moazzami et al., 2011).
The causes of claims identified by (Moazzami et al., 2011) will be further
examined in the literature review chapter and conceptual frame work of this
dissertation. The emphasis on causes of claims will also be reiterated in the analysis

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chapter due to the importance of this element on claims management and

substantiation.
1.2 Statement of the Problem

As mentioned earlier in this chapter, almost all construction projects of
considerable contract values and significance face delays and cost overrun. This is due
to the fact that during certain phases or all phases of a project, certain constraints are
imposed by the Employer, Engineer or the Contractors ineffectiveness which lead to
the occurrence of delays. These delays urge the Contractor to tender claims which are
either related to time, cost or both. This is due to the dominance of the Employer as a
contract party, who leaves the Contractor with no other option but to protect his
interests by preventing any liquidated damages or penalties imposed by the Employer
due to fear or doubt that the delivery of the project within the agreed time frame and
budget may not be achieved. Regardless of the resulting impact, a claim will surface
and the Contractor will need to substantiate and justify his claim. In most contract
forms, the entitlement made by the Contractor is valid if the contractor is able to
establish his case with proper support and substantiation.
Management and substantiation of claims is considered as very essential and
fundamental in the construction industry. This may be attributed to the fact that few
research projects have been reported, which target the auditing of an overall claims
management process in the context of identifying deficiencies, ranking their
significance and proposing solutions (Ren et al., 2001). The more convincing the
claim, the closer the Contractor is to achieving his target by being guaranteed
additional monies or time to cover losses and moreover providing a shield against
counter claims or penalties imposed by the Employer.
In this research, the fact that the researcher was working within a construction
company referred to as ABC has made this research more tangible and practical. The
involvement of ABC firm in projects which had incurred claims greatly contributed to
the availability of data necessary to fulfil the research covering claims management
and substantiation. The involvement of the researcher may have not been direct as
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other members of the organization on the various projects, yet being a witness to the
events as part of the team which worked in these projects, he deemed the issue of
claims management as being of crucial importance and one which needed to be
addressed specifically in the UAE market.
By observing the processes and events which took place, the researcher was
able to present this research as an attempt to understand construction claims and the
management from a managerial perspective rather than merely approaching it from a
contractual perspective. The observation process over the years of executing projects
in ABC further helped in understanding the practices of co-workers and the
managements strategy whilst handling and managing claims. In this observation
process behaviour, responses and setbacks were all indirectly observed and recorded
for the purposes of research and advice on betterments to this vast field within project
management.
1.3 Aim and Objectives

The prime aim of this study is to explore and how construction claims are managed
and substantiated by contractors in the United Arab Emirates. This aim can be
achieved by covering the following objectives:
1- Investigating features of enhanced claim management systems.
2- Investigating the claims management in the UAE and current practices by
construction professionals.
3- Reviewing and investigating the various types of claims known to construction
practitioners and the nature of each type.
4- Investigating the shortcomings of the current practices in claims management
and ways of their enhancement and betterment.
5- Conducting a case study analysis on real life projects which encountered
contractual claims.

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1.4 Scope of the Research

The importance of this research lies in the fact that it provides guidance to
Contractors on the methods by which contractual claims are substantiated and
consequently managed in the construction sector. The research is undertaken in the
UAE and is based on construction projects executed by a leading construction
company referred to earlier as ABC. ABC has encountered claims and rights due to
various reasons in different projects which are yet to be settled with the Employers.
The dissertation will cover three projects recently executed in the UAE and are
located particularly in Abu Dhabi and Fujairah. In these projects, claims have evolved
as a direct result of delays and changes imposed by the Employer and the Engineer. In
the three claims, the Contractor had to demonstrate his entitlement for both additional
time and cost. From these, certain insights can be gained which might be of
considerable assistance in improving the methods by which claims are managed and
substantiated.
Two perspectives will be considered for management of claims management.
They are the legal/contractual perspective and the managerial perspective. An
integrated approach will be introduced to allow for an enhanced claims management
system which can operate throughout the lifecycle of the project rather than towards
the conclusion of that particular project. This research work targets the construction
sector and involves three main stakeholders who form parties in a construction
contract, and are defined in (Winkler and Chiumento2009, p.13) in Figure 1-1:
1- The Employer or Owner.

2- The Engineer/Design Professional.
3- The Contractor.

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Figure 1-1: The owner, architect, and contractor triangle

(Source: Winkler and Chiumento 2009, p.13)
The three different projects covered as part of this research were executed by
ABC over a time interval of approximately three years. It is essential to examine
briefly the nature of these projects and the type of agreement signed in each project.
The type of agreement or contract plays an essential role in both claims formulation
and management. Table 1-1 has been compiled to help understand a summary of the
three projects this dissertation will cover as part of the research analysis chapter:
Project
Description
Contract Type
Project A
Convention Centre
Traditional (Lump sum)
Project B
16 storey hotel
Traditional (Lump sum)
Project C
20 Km Highway
Re-measurable Contract (unit rate contract)
Table 1-1 ABC Projects and Contract Types

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1.5 Research Questions

Certain research questions have been raised from the main conceptual framework
and literature related to claims management and substantiation, in addition to the
review of the case studies. These questions are as follows:
1- What are claims and why do they need to be managed by contractors in the
construction industry?
2- What are the shortcomings of the current claims management practices?
3- What can be noted as critical success factors which can contribute to the
betterment of claims management, substantiation and presentation?
4- What are the elements of well-structured claims management?
By addressing the above mentioned research questions, the framework of this

research can be structured to ensure an effective approach to the implementation of
claims management in construction projects, and the successful accomplishment of
the aim of this study. The questions will be further investigated in chapter 5 which
includes the analysis of the case study.
The research questions have been formulated before the conduction of the field
work. However the qualitative nature of the study allows for iteration and recursion
(Yin, 2011) .In other words the researcher may progress in his research and revisit
previous work to make modifications to aspects such as the research questions.

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1.6 Research Structure

This research work has been structured into six main chapters. The first chapter
includes a background of the UAE construction industry and how construction claims
appear and are submitted by contractors. It also includes a review of the main aim and
objectives of this research and the statement of the problem.
Chapter two of this dissertation is the literature review chapter. In this chapter,
various opinions written by scholars in the field of contractual construction claims are
reviewed. Various types of claims are also investigated from the points of view of
different writers based on the definition of claims and views of construction law with
respect to claims in the UAE.
Chapter three is the conceptual framework chapter which includes the
theoretical flow of this work. In this chapter certain critical success factors and critical
failure factors will be identified. The same will be used in later chapters through
comparison of the research findings, literature review and their alignment with the
conceptual framework of this dissertation.
Chapter four includes the methodology used to fulfil the research requirements
and the approach used. The nature of this study will be qualitative, since it will
include interviews with both claims managers and project managers.
Chapter five includes the analysis of the data amassed by the means of
interviews and case studies. Three real life projects recently executed by a leading
construction company will form the core of the analysis. The interviews will be
conducted with construction professionals working for considerable years in the
industry.
Chapter six is the last chapter of this dissertation and comprises of the
conclusions, recommendations and limitations of the study. In this chapter, further and
future suggestions and insights are also given to scholars who intend to complement
the findings of this study in further refined or detailed forms. It will also summarize
the findings which were envisaged after the analysis of the data retrieved through the
interviews conducted with project managers and claims experts.
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CHAPTER TWO LITERATURE REVIEW

2.1 Introduction
One of the first stages of almost all research types is to explore literature and
theories which are relevant to that particular research area (Fellows and Liu,
2008).The literature review chapter presents an extensive study of claims and the
types of claims identified by various scholars in an attempt to seek what previous
scholars have found and theorized. Moreover, a look into concepts related to
construction claims such as contracts, construction law and managerial approaches to
claims is important and cannot be overlooked while describing construction claims.
In this chapter, claims are initially defined. After understanding the concept of
claims, further literature describing the types of claims is presented. With this
understanding of claims, more insight is given into the process of claims management
and substantiation by reviewing the various essential tools and factors as identified by
claim specialists, which have contributed to the enhancement of claims management
in the current practices in construction projects.
2.2 Definition of Claims

Many scholars have written profoundly on the topic of claims in construction.
Among these scholars is Scott (1991) who defined claims as the assertion of a right.
Other researchers such as Monsey (1993) have stated that construction claims are
change orders which have not been accepted by the various parties of the contract.
However, the most technical definition of claims is the one presented as the assertion
of an alleged right by a claimant, commonly by the contractor requesting additional
time and/or payment as direct result or circumstance implied in the terms and
conditions of the contract (Chappell, 2011). It can be inferred from the former
definitions that claims, with respect to Contractors, involve a request for extension of
time or additional monies on account ofobstructionsengenderedduring the execution

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of the scope of works covered under the contract and which may not be considered as
a breach or failure on behalf of the Contractor.
It is clearly evident that, despite the new innovations in administering
construction contracts, the circumstances that cause claims on most contracts will
continue to appear (Harris and Scott, 2001).Similarly,in the United Arab Emirates,
construction projects are frequently faced by delays and obstacles which tend to be
very similar to the ones perceived in global construction projects. These delays
usually result in unsought results such as claims, disruption and disputes which tend
tobe time exhausting and of considerable costs which may be solved only through
litigation (Chen, 2008).With the frequent occurrence of claims, it becomes prudent to
study claims management and substantiation as a daily practice in the life cycle of
projects.
Among the other reasons which make claims of great significance and appreciation
in construction projects are the ones identified by Lihong (2011) who clearly suggests
three main aspects of construction claims. These aspects are:
1- The construction claim is an efficient path for the contractor to reduce the risk
loss in engineering project's implementation process.
2- The project claim is an important means for the contractor to maintain its
contract rights and interests.
3- The project claim reflect contractor managerial and administrative expertise is
a main driver for claims from a contractors perspective which is to make
profit.
2.3 Types of Claims

Claims tendered by contractors versus employers usually fall under four
different categories which are contractual claims, common-law claims, quantum merit
claims and ex-gratia claims (Chappell, 2011). The most common claims that tend to
emerge in the construction industry in the UAE are contractual claims which take

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place for various reasons (Zaneldin, 2006). Such claims are based on a clause or
clauses in the contract which specifically allow the contractor to put in a claim in
certain decreed circumstances (Chappell, 2011).
In construction projects, the tendency for the occurrence of claims in
construction projects is high, given the fact that most projects are shifted towards the
fast track approach (Faridi and El-Sayegh, 2006). Thus, contractual claims can be
further divided to include extension of time (EOT), prolongation and acceleration
claims. These three types of contractual claims are the most common in occurrence in
the United Arab Emirates and will be the core of this research. With the review of
each type of claim, a clear vision can be then established on claims management and
substantiation of each type.
2.3.1 Extension of Time (EOT) Claims

The extension of time claims occurs in projects where time risk is passed on to
the contractor executing the project. Intrinsically, delays beyond the speculated time
of completion in the contract may result in the contractor having to bear liquidated
damages (LD) as a penalty of the delay. However, if these delays are caused by the
client, it is important for the contractor to assure he claims for adequate additional
time beyond the date of the contract expiry (Williams, 2003). Moreover, extension of
time claims help reduce or mitigate liquidated damages and establishment of the
contractors right to additional cost for the period granted post contract expiry
(Yogeswaran et al., 1998)
Where so ever liquidated damages are concerned, it is important to note that if
the extension of time granted by the Employer covers the entirety of the delay period,
then the contractor is no more liable for this delay. On the other hand, if the extension
of time granted by the Engineer and Employer compensates a period less than the less
than the full period of the delay or reasonable time required for completion, then the
period difference remains the liability of the contractor (Ribeiro, 1996). In other
words, it is imperative for the contractor to demonstrate his entitlement by the proper

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methods of substantiation for additional time in order to rightfully transfer all

liabilities to the Employer or other parties responsible for the occurrence of delays.
Every EOT claim formulated in any construction project goes through its
unique lifecycle and passes through various stages which are identified by (Keane &
Caletka 2008, p.9) as shown in figure 2-1 below, which is a diagram compiled by the
researcher to summarize the authors points :
The Baseline
programme
Delay Claim
Resolution
Project
Commencement
Delay Claim
Resolution
Deviation from
Baseline Program
Dispute
Resolution
Delay Occurrence
Revised Baseline
Delay Analysis
Award of EOT
Delay Claim
Submission
Negotiations
Delay Claim
Presentation
Delay Claim
Response
Figure 2-1: EOT Claims Formulation

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Amidst the critical stages of an EOT claim life cycle is the claim submission
(see (figure 2-1). When the Contractor has to submit his EOT claim to the Employer
and Engineer, certain factors have to be taken into contemplation. Gibson (2008,
p.155) amalgamates these factors in five main points which are crucial to any EOT
claim. These are:
1- The status of the material if extension of time arises.
2- The source of causation or event which calls for EOT.
3- The relevancy and of the cause of claim in the contract documents.
4- The potential effect of the delay on the overall work progress.
5- Likelihood of the event having impact on the specified date of completion of
various dates of completion if the contract implies more than delivery date.
Once the claim is ready and submitted by the Contractor, the next step will be to
present the claim inclusive of certain elements. These elements or claim structures are
stipulated by (Thomas, 2001) as follows:
Detailed description of the cause of delay and any supporting contractual
provisions in the contract which are being relied upon for the request for EOT
Dates of when the delay occurred and the total time interval of delay
The date of the formal notification of delay to the Engineer/ Employer and the
supporting document of notification.
Appendices to the EOT claim which include all the backup documents and
records.
A cause and effect study of the delays.
Diagrammatic exemplification demonstrating the position of the baseline
program, with respect to the new dates of completion taking into consideration the
arising delays.
Delay analysis showing the effects of the delay on the critical path and effects on
the float per activity and total float.
A formal statement requesting an EOT with full substantiation and supporting
documents.
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The process of estimating time in EOT claims is considered a cumbersome process

for a Contractor. This is due to the fact that many complex factors are usually
involved in the preparation of EOT claims. According to Palaneeswaran and
Kumaraswamy (2008), the flowchart represented in figure 2-2 is used by contractors
to establish time in EOT claims:
Standard
Form of
Contract +
Special
Conditions /
Amendments
Collection
List of permissible cause of

delay for time extension
claims
List of delay events and

their corresponding causes
of the delay
Reference
Checking the eligibility

of delay events for
extension for time
Reference
Verification
Contractor
Eligibility results
Selection
Duration of EOT
Selecting a method for

quantifying the
duration of time
extension
Special Formulae+
case references
Quantification procedure
References
Reference
List of delay events and

their corresponding causes
of the delay
Selecting a method for

quantifying the
duration of time
extension

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Figure 2-2: A basic data flow diagram for contractor side estimation of time extension claims
(Source: Palaneeswaran and Kumaraswamy 2008, p.428)
It can be seen from the flowchart in figure 2-2 above that time can only be
estimated for EOT claims once the causes of delay for time extension are deemed
permissible by checking the justification of these delays.From then onwards, the
Contractor can engage in assessing the time quantum.
Nevertheless, the Palaneeswaran and Kumaraswamy model tends to neglect the
cost factor associated with the time. Claims quantum is depicted by (Monsey, 1993) as
being quantum of time and cost. Accordingly, the emphasis has to be made on the
need to compute the amount of impacts by showing the quantum of cost and
additional time, resulting from identified delays (Williams, 2003).
Finally and upon the submission and receipt of the claim from the Contractor,
the Engineer has to reply to the Contractors claim expressing content or discontent
within a period of 42 days after receiving the claim or the particulars it is supported by
(Ndekugri et al., 2007). Hereabout, the roles of the Engineer and the Employer come
into place, as shall be seen in the coming sections, in which FIDIC identifies the onus
put on the Engineer in his duties to assess Contractors claims.

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2.3.2 Prolongation Claims

Followed by the justification of the claim, the succeeding challenge is to
propose the quantum of the claim, by including both the direct costs and delays
resulting of the unpredictable circumstances and their accumulative effects (Ren et al.,
2001).In other words, the concept of EOT and prolongation cost are strongly linked
with each other. After the EOT claim takes place and is approved through the
Engineer expressing his consent and granting the Contractor additional time for
completing the project, prolongation claims develop. Therefore, prolongation claims
are usually formulated towards the end of the project and that is constantly the period
when prolongation claims are formulated by the Contractor (Ingram, 2004).
In prolongation claims, Contractors have the privilege to request recovery of
additional off site overheads in the event where the works at site had been expanded
due to excusable delays which allow for additional cost entitlements (Ingram, 2004).
However, the payment is not limited to the overheads as described by Ingram, but it is
also extended beyond to include many other costs borne by the contractor during the
extended period of time acknowledged by all parties. One of the most important
formulas used by Prolongation claims managers in estimating offsite over heads is the
one identified by (Thomas, 2001) as Hudsons Formula . This formula represented
below is very commonly used by many of the claims specialists:
Head office overheads (profit) % /100 X Contract sum / Contract Period X (Period of delay)
The other costs referred to herein include all the costs which the Contractor
incurred during the period of prolongation beyond the expiry of the original contract
period endorsed by the two parties. The costs of prolongation may vary from project
to project and depend on the circumstances imposed on a particular project or
situation. Some of these costs may include cost of direct and indirect staff, labour,
tools and plant and site expenses.

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2.3.3 Acceleration Claims

Acceleration measures come around in projects where high risk, time
contingency loss, disruption and exposure to more delays exist (Sun and Meng, 2009).
Acceleration by definition means the process of taking measures to compensate for
time loss by attempting to complete the scope by specified durations or as a remedial
recovery of delays (Gibson, 2008). Such measures usually have a tendency to increase
the overall cost of the project. On the other hand, acceleration can be defined as the
process of increasingthe speed and thus, in the context of construction contracts, an
early closeout (Chappell, 2011). However, the question raised in the case of
acceleration is finishing before what? The completion can be either before the
contract end date or before the excusable delay duration exceeding the contract time
limit.
Keane and Caletka (2008, p.99) categorize acceleration to be either instructed or
constructive. On the other hand, Greenstreet et al. (2005) state that instructed
acceleration refers to the actual acceleration at the contractors discretion and may
provide the basis for increased costs. Constructive acceleration as understood by
(Greenstreet et al. 2005) takes place in the situation where the contractor has
experienced delay, but has not yet been granted an extension of time.
Acceleration tends to take place in the event of certain situations. Scholars like
Chappell (2011, p.41) point out these circumstances as follows:
1- Through mutual understanding and consent among the contract parties,
conditionally if such measures are called for in the contract upon the decisive
directive of the Engineer.
2- Based on unilateral good intentions by the Contractor in an attempt to mitigate
the delay.
3- By substantial proof by the Contractor that acceleration is the only choice opted
for considering the situation.
On the other hand, Rider and Long (2009) attribute the occurrence of
acceleration or pacing to numerous factors which are summarized by them as being
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either late change orders, nominated contractors or late approvals on submittals and
untimely changes. It is important to understand the situations in which acceleration
usually takes place by agreement. This is attributed to the fact that non-agreement on
acceleration might jeopardize the Contractors acceleration claim. These situations
have been illustrated by Chappell (2011, p.43) as:
1- Where it is improbable that the works can be concluded by the contract expiry
period, due to delays making the Contractor eligible for EOT.
2- In the event works cannot be completed due to delays the contractor is
accountable for.
3- Due to concurrency of delay, caused by both the Employer and Contractors
delays simultaneously.
4- A decision made by the Employer that he requires the project concluded and
handed over before the contract duration.
Regardless of the reasons which cause acceleration to occur, projects costs will be
increased. These are usually presented by the Contractor to the Employer in the form
of a claim. Once the acceleration measures are justified as being constructive and fall
as part of the mitigating time factor, the Contractor will be eligible to claim his costs
for the measures he has taken. These costs to which the Contractor is usually entitled
are classified by Haidar (2011, p.114) as five different costs, which are:
1- Cost for extra manpower and plant due to the loss of productivity resulting
from exaggerated thrust of resources and machinery.
2- Cost of extra logistics needed or additional working hours (i.e. airfreight)
3- Cost of expanding site services and facilities.
4- Other costs seen necessary to expedite works.
5- Staff and engineering overtime and incentives.

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2.4 Causes and effects of Claims in construction

Claims in construction projects tend to have a set of causes for their occurrence
and effects. The contractor needs to identify these causes carefully so as to
substantiate his claim in the right way. The causes of claims in construction projects
are usually known and pre-identified. If these causes are not evoked by the contractor,
then they do not fall under his liability. Longbottom and Rawling (2008) summarize
the causes of claims into a few which can be either excusable, compensable or both.
Figure 2-3 clearly shows the type of event resulting in a claim:
Figure 2-3: Causes of Claims

(Source: Longbottom and Rawling 2008, p.3)
Longbottom and Rawlings table tends to include some of the causes of claims
in construction projects. However, these are a few sources from which claims can
arise and will be profoundly reviewed in further sections of this chapter.
A direct outcome of claims as mentioned earlier would be completion schedule
delay, assuming the Contractor is able to establish his entitlements to additional time

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post contract expiry (Hwang and Low, 2011). If the claim is managed appropriately,
the contractor can further ensure the award of cost compensation.
The strong link between claims and time delays can also result in cost
escalation. In other words, the increase in the amount of money required to construct
the project far beyond the initial allocated budget (Kaliba et al., 2009).
Both time and cost claims in fact can lead in most situations to unsought
consequences. On the level of relationships between the contract parties, they can
have a very undesirable effect. This is attributed to the fact that in most occasions,
claims have a relevantly high tendency to cause disputes, conflicts and alienation
between the various key stakeholders or contract parties. Consequently, disputes in
most situations result in expensive and remorse proceedings like arbitration and
litigation (Cheung and Yeung, 1998).
In summary of the above, claims in construction projects are direct causes of
schedule overrun. With the schedule overrun, cost escalation can consequently appear
leading to disputes and conflict between the various contract parties. These
consequences come as a result of certain events and causes identified by various
scholars in the field of claims and project management.
In light of such complexity of time and cost factors resulting of claims, the
contractors need to consider the implementation of claims management as a wellstructured discipline along with other project management relevant areas of
knowledge.

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2.5 Claims Management

The importance of claims management does not only exist in the fact that this
field of management is part of project management, but because it is an integral
component of the contractors business strategy (Lihong, 2011). Another aspect of
importance in this managerial field is the risk contained within construction projects
which has become the focus of attention since risk is strongly linked to the cost and
time overruns (Kartam and Kartam, 2001). Hence, the uncertainty found in
construction projects is greatly linked to time and cost overrun and subsequently is
related to claims which need to be conservatively managed by the contractor to ensure
his rights.
With the existence of high risk in construction projects, claims are considered
as an efficient path for the contractor to reduce the risk loss in the engineering
project's implementation process; various risks concealed in engineering project's
implementation process, like economic risks, contract risk, natural condition risk as
well as construction's risk (Lihong, 2011).
The concept of claims management can be defined as the process of deputing
and managing resources to advance a claim from identification and analysis through
preparation, and presentation, to negotiation and settlement (Keane, 1994; Ren et al.,
2001).Hence, it is prudent for the Contractor to establish a well-structured claims
management whether in house or through appointing a third party specialist to work as
part of his team. This team can then identify claims and prepare them in an initial step
before the final negotiation and settlement.
The claim management process like any other system undergoes a life cycle.
This life cycle has been identified by (Levin 1998; Ren et al., 2001) to follow a
standardized form which is illustrated in Figure 2-4 to contain 7 processes leading to
claims
management
and
they
are
the
recognition,
notification,
accurate
documentation, time and cost, pricing, negotiation and dispute resolution:

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Figure 2-4: Claims Management Lifecycle

On the day to day claims management process, certain tasks need to be
considered by the Contractors claim management team involved. These have been
identified by (Apte and Cavaliere, 1992) as three main tasks which are necessary for
the Claim Handling Process (CHP):
-
The initial challenge is to decide on the quality and quantum of resources actually
needed for the handling claims.
Exercising monitoring and control over the handling process of claims by ensuring
the implementation of remedial acts if and when found necessary.
The last task is to specify CHP procedures, which includes training and means of
research and development in the field.
In the management of claims, the concept of concurrent delays is another very
vital aspect of construction projects which contractors try to avoid. A concurrent delay
is the event in which a minimum of two delays take place simultaneously, either of
which, had it occurred alone would have affected the entire completion schedule
(Arditi and Pattanakitchamroon, 2005).
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In the event that concurrency cannot be avoided, the owner is not required to
pay the contractor extended project costs if the contractor is responsible for
independent concurrent delay (Rider and Long, 2009). Figure 2-5 retrieved from
(Itani, 2009) demonstrates concurrent delays with respect to types of delays which
clearly indicate that in the event of two delays, one by the Employer and the other by
the Contractor, concurrency of delays will occur.
To defend their position against any accusations of concurrency, Contractors
usually refer to pacing delay. This is supported by the realization of the existence or
potential existence of employer delay on the longest critical path. The Contractors
may decide to slow down their work on non-critical activities in order to keep pace
with employer delay (Zack et al. 2000; Itani, 2009).
Employer Delay
Excusable Delay
Compensable
Delay
Concurrent Delay
Excusable Delay
Compensable/N
on Compensable
Delay
Contractor Delay
Non-Excusable
Delay
NonCompensable
Figure 2-5: Types of Delays and Concurrency

(Source: Itani 2008, p.26)
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Another indispensable dimension of a proper claims management system is

good planning.Winch and Kelsey (2005) imply that project planners have basic and
fundamental duties which are common in almost all construction projects. These
duties as stipulated as being the recognition of the full
site construction work
programme, the entire procurement logs , necessary dates which affect procurement of
material such as design data, the drawings preparation and submission by the
contractor and finally the duty of approving these drawings and submittals in timely
manners by the Engineer (Winch and Kelsey, 2005).
Strategy is another vital dimension in respect to claims management.In a
simplified construct, strategy is looked on as a consolidative approach which can link
the intended purpose with the course of action (White, 2005). In consolidated claims
management, the idea of developing a claim is strongly linked to procedures and
mechanisms of claims development and substantiation. Kerzner (2001) assumes that
one of the earliest stages of strategy is to implementing a strategic planning process by
the apprehension of the general surrounding environment where the strategy will be
executed. The environment in this case is each project aside. In other words, the
strategy for claims management can be set project wise with the support of the top
management to handle each claim depending on the environment in which it is
situated.
Teams and team awareness are the last identified essences of claims
management. This is ascribed to the fact that teams who hold extensive experience are
needed to tackle complicated work which may require tools such as innovation,
creativity , and an abundance of knowledge bring about positive effects (Loo, 2003).
Features such as creativity and abundance of knowledge increase the teams
awareness towards proper reporting of claims drivers to the management. In
conclusion effective team practices which ensure the team worked towards achieving
its goals and was receptive to collaboration with other teams is therefore an advantage
for the management of claims (Baiden and Price, 2011).

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2.6 FIDIC Views on Claims

FIDIC was formed in the year 1923 by three national associations of consulting
engineers in Europe (FIDIC, 1998). The establishment of FIDIC came as an attempt to
maintain the rights of the parties involved in construction contracts by offering general
clauses and conditions which can be applied to many forms of construction contracts.
The design of FIDIC was initiated by the Employer and his representative, the
Engineer, and has been applied in many countries worldwide (FIDIC, 1999). One of
the countries which apply FIDIC is the UAE which has adopted FIDIC 1987as a
standard form of contracts to formulate local contracts between the Employer and the
Contractor.
FIDIC includes certain clauses related to claims which are rather generic and
abrupt. However, these clauses have been strictly adhered to by Employers and
Contractors in addition to the particulars of the contract. In the event the contractor is
the claimant, FIDIC (1999) defines certain clauses which have to be strictly abided by.
These clauses by reference and description are summarized in table 2-1:
FIDIC Clauses related to Claims
Clause
reference
An extension of time for any such delay, if

1-
completion is or will be delayed.
Sub-Clause 8.4
The Contractor shall give a further notice if he

incurs Cost as a result of a failure of the Engineer to
2-
issue the notified drawing or instruction within a
Sub-Clause 20.1
time which is reasonable

Variation means any change to the Works, which
345-
is instructed or approved as a variation under
Clause 13
Take over certificate

Clause 10
Cost means all expenditure reasonably incurred
(or to be incurred) by the Contractor, whether on or
Definition
off the Site, including overhead and similar charges,
1.1.4.3
but does not include profit.
Table 2-1- FIDIC Clauses relevant to Claim

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2.7 Delay Analysis Methods

A delay is the time overrun post a specified completion date in the contract or
to a date different than one agreed among the parties for the completion of a project
(Assaf and Al-Hejji, 2006). (Reams 1990; Williams, 2003) categorize delays on the
basis of compensation and excusableness into three categories which are:
excusable/compensable delays, excusable / non compensable delays and nonexcusable/non compensable delays.
The valid form of delay which is beneficial to the contractors claim is the first
type where the delay occurred due the Employers fault and therefore, as the
contractor is not found culpable, but on the contrary he is eligible for an extension of
time. In the event of such delays, the contractor is obliged to submit a notice of his
intention to claim, which is has to be later followed by particulars of considerable
detail on the claim as an attempt to formalize the delay occurrence (Kumaraswamy
and Yogeswaran, 2001).
In a study which covered a wide sample of consultants, contractors and owners,
Assaf and Al-Hejji (2006) found that delays in construction projects can take place
due to 9 main factors. These factors are categorized by (Assaf and Al-Hejji, 2006) and
are represented in figure 2-6 for a better understanding.

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The Project
The Owner
The Employer
The Engineer
Sources of Delay
The Material
The Design
The Equipment
The Labor
External Factors
Figure 2-6: Causes of Delay

The issue of delay is accompanied by the concept of delay analysis and various
techniques used to evaluate and measure delay.The delay analysis procedures will
involve all the evidence and data which are recorded during the construction phases in
the form of schedules, updates and other valuable documents (Yang and Kao, 2011).
The most popular and identified set of delay analysis techniques used by claims
analysts are the ones described by (Braimah and Ndekugri, 2007) as the as-planned
versus the as-built technique, impacted versus the as-planned technique, collapsed asbuilt technique, window analysis technique, and time impact analysis. According to
Arditi and Pattanakitchamroon (2005), the first method of as-planned versus the asbuilt depends on the identification of the difference between the as-planned schedule
and the as built schedule of the project. The second delay analysis method is the

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Impacted As-Planned which involves integrating perceived delays as normal activities

into As-Planned CPM schedule to establish how project completion date has deviated
as a result of those delays (Braimah and Ndekugri, 2007).
The Window Analysis attempts at determining the state of the project
immediately prior to the occurrence of delays, such as the monthly update of the CPM
by identifying delay within a window of time (Fredlund et al., 2003). On the other
hand, the time impact analysis technique determination of the project delay caused by
each of the delaying event using critical path method is dominant along with other
dimensions (Mohan and Al-Gahtani, 2004).
The delay analysis procedures have been described by (Kao and Yang, 2009)
as going across phases. In each phase questions about the activities and purpose are
raised to reach to the end result of delay analysis. These have been illustrated in figure
2-7 showing the different procedures and processes:
Figure 2-7: Delay Analysis Procedures

(Source: Kao and Yang 2009, p.410)

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2.8 Change and Change orders

Change is considered as inevitable on almost all construction projects due to
the uniqueness of each project and the limited quantum of resources available for
completing the project (Hanna et al., 2004). Barnard (2005) defines change in
construction projects as the situation where the contractor is directed by the
Employer to carry out works not part of the original work brief and plans realized by
the contract.The ineluctability of changes is assigned by (Yitmen et al., 2006) to the
fast-track construction nature, where construction commences prior to the completion
of design, and the scope of work keeps changing throughout the projects different
phases.
The occurrence of change in construction projects is attributed to the rigid
scheduling or the mere existence of fast tracking as an only choice to execute projects
(Gunduz and Hanna, 2003). On the other hand, Motawa (2003) specifies the reasons
behind change as being lack of information at the initial stages of projects of the
project variables which lead to insufficient knowledge of future circumstances and
impreciseness arising from equivocalness in the project criteria. Irrespective of the
change driver or type, the deficiency of perceptiveness of the impact of such changes
on project operations has been a quality of most stakeholders in construction projects
(Moselhi et al., 2005).
The appearance of changes has been strongly linked to claims by Han et al.
(2011) who believe that design and construction of projects are greatly affected by
design changes which are a main contributor to schedule delays and cost overruns in
projects. Changes in construction projects are usually followed by change orders or
formal directed change, as presented by (Molly, 2007). These are instructions from the
Employer or Engineer to the Contractor to implement these changes.
A direct result of change is usually additional cost. Wherever the cost of change is
involved, the contractor is entitled to recover costs associated with change orders in
the form of a claim in certain cases. These cases are highlighted by Jergeas et al.

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(1994) as being the cases of direct labour cost, direct material cost, overheads and
profit and tools and plant.
In a unique study attempting to rank causes of claims in the UAE, (Zaneldin, 2006)
found that change has the highest frequency as a direct cause of claims. His findings
were based on projects constructed in the UAE from the period 2000-2004 and they
are summarized in Table 2-2. It is clearly understood from the table below to what
extent changes are significant and potently related to claims occurrence:
Causes of Claims
Change or Variation Orders
Delay caused by Owner
Oral Change orders by owner
Delay in payment by owner
Low price of contract due to high competition
Changes in material and labor costs
Owner personality
Variations in quantities
Subcontracting problems
Delay caused by contractor
Contractor is not well organized
Contractor financial problems
Bad quality of contractor's work
Government regulations
Estimating errors
Scheduling errors
Design errors or omissions
Execution errors
Bad communication between parties
Subsurface problems
Specifications and drawings inconsistencies
Termination of work
Poorly written contracts
Suspension of Work
Accidents
Planning errors
Importance
Index (%)
55.00
52.50
51.40
48.90
48.60
46.10
45.10
44.70
44.00
43.70
43.70
43.70
42.60
40.10
39.10
39.10
38.40
37.70
37.70
37.00
35.60
35.60
33.80
33.80
33.10
32.70
Rank
1
2
3
4
5
6
7
8
9
10
10
10
13
14
15
15
17
18
18
20
21
21
23
23
25
26
Table 2-2: Ranking the cause of claims and the frequency

(Source: Zaneldin, 2006, p.455)
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A direct consequence of changes as described by Alnuaimi et al. (2010) is that

changes will mostly result in revision of plans, addition of works, more time for
decision making, material re-sourcing, etc. Re-work and consequently a delay come
with the addition of work. Meng (2009) concludes that changes in construction
projects can lead to time and cost, and risk related effects, all of which can cause
delays.
With the occurrence of changes and change orders, the direct impacts of change
orders surface and have been identified as having an undesirable impact on
construction productivity, resulting in a drop in the labour efficiency (Moselhi et al.,
2005).The justification of change orders as described by Yitmen et al. (2006 ) exist for
the basic aim of providing tolerance in a manner that satisfies the construction
demands of owners throughout a project and serving in eliminating errors found in the
design, contract documents and methods used in construction. The entirety of these
impacts can either be overcome by extending the duration of the contract through
granting the contractor an EOT or through acceleration measures to eliminate the time
factor at the account of cost or by allowing for both as has been demonstrated in
earlier sections of this chapter.
From an Employers perspective, implementation of change management
systems in construction projects can help in minimizing cost, time overruns and
improving quality dimensions (Hwang and Low, 2011). Nevertheless, Employers
awareness does not seem to exist in understanding that factors such re-design and
change can massively reduce project well-being by attracting re-work, requiring
additional time and resource costs (Han et al., 2011).
On the other hand, and from a Contractors perspective, the importance of
change management is derived from the fact that change management is inherent in
project management and is considered as one of the best ways to deal with changes
(Zhao et al., 2011).Management of change is also in dispensable in accordance with
the contract and compensates the contractor for changes authorized by the Employer
and the Engineer when quantities increase is a result of change (Bunni, 2005).
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2.9 Records and Documentation

The basis of any strong claim management system greatly depends on the
presence of a well-structured documentation system. When the contractors claim
team meets up to prepare the project claim, the first step they take is to read the
documentation available and the level of detail these documents bear (Baram,
1992).The documents may include and are not limited to the delivery notes, personal
diaries, minutes of meetings, reports, progress photos at various stages,
correspondence and a variety of other sources in the site (Scott, 1990).
Ingram (2004) emphasizes that it is of high importance that records are kept
from the outset of a project, especially if the likelihood of claims occurrence exists.
An overall maintenance of such records is likely to speed the financial and time
related claims formulation and substantiation.
Moreover, Keane & Caletka (2008, p.68) assume that with the establishment of
good record keeping grounds, the administrators of the contract are often able to
access fundamental information swiftly enough to act upon the emergence of
problems instantly. Consequently, this information is needed for the proper backup of
claims for EOT and cost by the contractor, and simultaneously proper assessment by
the Engineer (Scott, 1992).
Notice letters are other features of good claim documentation in which the
contractor can estimate the time delay and cost by reporting the event to the Engineer
and Employer upon occurrence (Dobbin, 2006). Conversely, verbal instructions by the
Employer or Engineer are regarded as indicators of poor documentation and record
keeping which are often neglected by the contractors project manager. The scenario
which usually takes place is that the instructions are carried out by the contractor
during the execution stages without the proper documentation or official notification
by the contract administrator. Such an act usually jeopardizes the contractors
entitlement for time and cost.

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Keane and Caletka (2008, p.81) contend that FIDIC contract forms all contain
provisions for the contractor to confirm architects' or engineers' verbal instructions,
and such instruction will be deemed to be architects' or engineers' instructions if not
dissented from in writing within the period specified in the contract. In lieu of verbal
instructions, the right practice would be that scope changes should be initiated either
by a change order, letter of intent, or field directive (Bu-Bshait and Manzanera, 1990).
Turner (1995), on the other hand, summarizes the aspects of record keeping in
context to claims management as 5 major areas which need to be considered as part of
a proper claim support documents. These are:
1- Accumulating comprehensive records of the relevant documents and data

which may help in a retroactive analysis.
2- Daily, weekly and monthly issuance of progress reports inclusive of :
The work progress containing figures, facts and dates.
Descriptions of the conditions at site such as the weather circumstances.
Delays in deliveries, hold-ups due to Employer interference or breach.
Requests for information and the dates of reply by the Engineer.
Elaboration on the works accomplished.
3- Emails, phone conversations and verbal directives made by the Employer or
his representative the Engineer.
4- Minutes of Meetings which should not be allowed to pass unanswered or
uncommented since silence on a matter of dispute will result in moving the
burden on to the contractor.
5- Photographs which include dates and time of the photos pose an essential
source of substantiation, especially when these are taken at various stages of
the project.

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The common practice among contractors tends to neglect the essentiality of

maintaining proper records. As such, improper record keeping can, in many instances,
result in the loss of important project data or history of events which has occurred in
the lifecycle of the project. This information may not be needed at that phase of the
project, but will be required towards the end when claims are presented and require
further substantiation.
Conversely, and in the terms of poor record keeping, Jergeas et al. (1994)
assume certain factors to be sources of failure. These are identified by them as the
failure to document delays and their impacts and proceeding with change orders
without written consent by the concerned parties.
In summary, proper and improper records keeping can result in advantages and
disadvantages respectively to the process of managing and substantiating claims. This
comparison has been amalgamated from this perception and can be seen in figure 2-8:
Proper Records Management Improper Records Management
- Establishment of a case in
the event of changes,
delays
and
obstacles
imposed by the Engineer
and Employer.
- Easy access for the claims
management team to
various
and
critical
documents needed for the
claim, which saves the
time and effort of the
claims management team.
- Loss of evidence for

directives made by the
Employer or the Engineer,
resulting in a weak and
poorly
substantiated
claim.
- Difficulty in formulating
the claim which leads to
high costs to employ
claims specialist and loss
of time in retrieving the
necessary data.
Figure 2-8: Proper and Improper Records Management

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2.10 Contract Administration

Contract Administration falls under the broader concept of Construction
Administration which involves all the day to day duties of which are monitoring the
communications, business systems, procedures, responsibility, authority, duties of all
of the parties, documentation requirements, construction operations, planning,
scheduling, payment administration, change orders, extra work, dispute procedures,
claim handling, negotiations and administrative closeout (Fisks and Reynolds ,2010).
For any construction contract to be professionally administered, the Engineer is
considered as a key player. The duty of the contract administration is usually assigned
by the Employer to the Engineer or the Architect. Both the Employer and Contractor
look to the Architect to be an impartial interpreter of the contract documents and the
meaning of the documents if unclear or found disputed (Winkler and Chiumento 2009,
p.177).
Ndekugri et al. (2007) find that in addition to the duties assigned to the
Engineer, he is considered as a neutral and independent party who as a professional is
trained to maintain a balance between the Employer and Contractor. Hence, fairness is
an essential characteristic which the Engineer should practice and have the freedom to
express. Discretion is another relevant feature the Engineer should be allowed to
exercise impartially when giving his decision, opinion and consent (Bunni, 2005).
Otherwise, contractors who sense a lack of impartiality on the part of the architect
may claim that the owner and the architect have entered into a conspiracy to
maliciously defeat their honest attempt at getting paid (Winkler and Chiumento
2009).In conclusion, the contract administration role played by the Engineer is of
great importance. Needless to say, the Engineer has constantly to remember that like
other stakeholders, he operates under the standards of project management defined by
PMI which is important to demonstrate commitment to ethical and professional
conduct (PMI, 2008). Such commitment ensures aspects like integrity and fairness in
the assessment of both the Employer and Contractors rights under the provisions of
the contract.
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2.11The Role of the Engineer in claims assessment and evaluation

In certain occasions of Contractors claims the Engineer may perform in
restricted way articulated for him in the contract (Chappell, 2011).Moreover, most
forms of contracts such as FIDIC call for a significant role for the Engineer to play in
the assessment of claims and evaluation. The Engineer or a consultant designated by
the owner is responsible for deciding the outcome of the contractors claim (Asem et
al., 2002). Once the claim is tendered by the contractor, the architect will become the
advisor to the owner and impartial arbiter of the construction documents during this
period (Winkler and Chiumento 2009).
In most situations, the determination of the Architect becomes influential and
maybe taken into consideration by the claimant and Employer, if the claim is settled
amicably. Otherwise, the process is then referred to other methods of dispute
resolution which have been validated such as formal arbitration and litigation
(Cheung, 1999). Itani (2009) summarizes the role of the Engineer under the Red book
of FIDIC as far as claims procedures are involved in figure 2-9. The figure is selfexplanatory on the proceedings of claims submission under FIDIC contract forms:

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Figure 2-9: General Sequence of Claims Procedure under the Red Book
(Source: Itani, 2009, p.25)
In modified versions of FIDIC, the Engineer is not authorized to practice the
right to agree or determine the extension of time or additional cost to which the
contractor is entitled to in event of excusable delays (Ndekugri et al., 2007). Thus, the
Engineer is no longer the determinate party and the direct contract parties have to
exercise other forms of dispute resolution techniques identified and known as
Alternative Dispute Resolution techniques (ADR).
ADR may start with direct negotiation, conciliation and mediation or winding
up in arbitration to litigation (Cheung, 1999). These are illustrated in figure 2-10 by
(Groton 1992 ; Cheung, 1999) in the forms of steps, whereas each step is associated
with a degree of hostility. It can be actualized from that costs tend to escalate with the
failure of one step of resolving a dispute and ascend to the next step of resolution:
Figure 2-10: Construction Dispute Resolution Steps

(Source: Groton 1992; Cheung 1999, p.190)
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CHAPTER THREE THE CONCEPTUAL FRAMEWORK

3.1 Introduction
The main purpose of the conceptual framework chapter is to align the aim of
this dissertation with the literature related to claims management and substantiation. In
other words, the exploratory and descriptive nature of this work makes it obligatory to
review the concept of claims and the main stakeholders involved in a construction
claim in an attempt to capture the main concepts such as claims, types of claims, delay
analysis and disputes prior to engaging in exploring management of claims and
methods of substantiation.
3.2 Claims Management Conceptual Framework

With the review of the literature which explores the types of claims and their
nature, a link can be identified between the causes and effects of claims. However, the
essential link is the one which indicates the current practices in claims management in
construction projects and the ideal practices which need to be considered by
construction professionals.
A comprehensive claims management system is then the one that will
encompass all that is needed to substantiate a claim as adequately as possible. In
order to develop the conceptual framework, the current industry practices need to be
reviewed. Only then can a claims management system be developed to meet the
expectations of construction projects and contractors. These practices are later
identified within this chapter as failure factors.
Figure 3-1 includes some of the necessary terminology and concepts which has
been explored in this research. These concepts are crucial for the understanding of the
dissertation workflow and conceptual framework it encapsulates. The research has
been designed to consider these concepts as the core of the conceptual framework and
was reviewed in both the literature and in the analysis chapters to try and achieve the
success factors across this chapter.

49
The common
types of claims
in construction
Investigating
the concept of
claims
Proper
Documentation
and records
keeping
The Concepts
of the
Employer,
Engineer,
Contractor and
FIDIC
Towards an Enhanced
Conceptual
understanding of
Claims Management
Approach for
construction
professionals
The current
practices when
dealing with
Claims
The causes
behind
claims
occurrence
Clarity and
awareness
about project
team
responsibilities
The Effects of
claims on
projects
Figure 3-1: Concepts Reviewed in the Research of Claims Management

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3.3 Current Claims Management Practices

In order to properly survey the issue of claims and methods of enhancing
claims management and substantiation, the current industry practices need to be
reviewed. This data can be collected from interviews conducted with industry
professionals as shall be demonstrated in chapter four. Simultaneously, the current
practices need to be compared and contrasted with the literature and suggested
practices scholars have applied or concluded in their research.
Moreover, the failure factors have to be highlighted with regard to current
industry practices in claims management. With this in view, the following factors have
been developed to define the various failure drivers which impose an obstacle on the
proper management and substantiation of claims or which are considered as
problematic to the process of claims management and substantiation. The same can
be considered as pre-implementation aspects of a successful claims management
system.
Critical Failure Factor (1): Ignorance of the impacts of Change & Change orders
Ignorance of change and change order impacts. This accordingly leads to acceptance
of change without study of the impacts and evaluation of the consequences.
Documented and well proven changes are an essential component of a Contractors
claim for additional cost and times which need to be addressed at all times.
Critical Failure Factor (2): Lack of Strategy
The lack of a clear strategy and strategic project management principles leads to loss
of objectives and focus within the Contractors organization. Furthermore, poor
strategic planning and management result in the absence of a mission and vision for
the project as a whole and not just the management of claims.
Critical Failure Factor (3): Team Weakness and Lack of Awareness
Team weakness and incompetence result in ambiguity and lack of clarity on the
reporting of issues, in addition to confusion in matters of what needs to be conveyed

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to management and what does not. Lack of competency leads to mismanagement of

the project and can have reversal effects where claims are concerned.
Critical Failure Factor (4): Poor Project Planning

The failure factor of poor planning and program updates occurs in the event of
deviation from the master program (baseline) without providing updated recovery
plans or necessary as-built work program in the Claim summary. Baselines, updates
and as-built programs are all fundamental aspects used by claims specialists in
substantiating claims and demonstrating delay analysis.
Critical Failure Factor (5): Failure of the Contractor to identify Concurrency of

Delays
Concurrency of delays may result in rejection of additional claim for money if one of
the delays is caused by the contractors failure. Concurrent delays are two or more
delays occurring at the same time when one or more delays maybe due to the
Employers failures rather than the Contractors fault.
Critical Failure Factor (6): Gold Plating
An improper record of events is the result when the Contractor accepts additional
work without account for cost or time. Gold Plating can be defined as provision of
minor or major additions to the project features free of cost and without proper
documentation or reference to the contract.
Critical Failure Factor (7): A Biased Engineer
A biased Engineer can cause a misconception to occur of the contractors claims and
entitlement and loss of right. The Engineer who does not administer the contract
impartially at all times is considered as a failure factor to the Contractors claim. If the

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Engineer tends to be biased to the client, the interests of the Contractor can be
jeopardized.
Critical Failure Factor (8): Improper claim formulation
Improper claim formulation may lead to the rejection of the Contractors claim and
consequently create alienation, dispute and conflict among the parties concerned. This
situation may also arise due to the incompetence of an appointed specialist who is not
well-experienced in handling and formulating claims.
3.4 Critical Success Factors for Claims Management

The main factors of success where claims management is concerned are the
ones which reflect to what extent the claim is substantiated adequately. These factors
can be taken as the basis necessary for structuring claims management systems.
Critical Success Factor (1): Proper understanding of the objectives at the project
initiation phase
The project commencement phase is one of the most important stages in
projects as far as claims are concerned. The very early stages of a project are the
stages when claims begin to arise due to various reasons such as delay, change and
design issues. At this stage, ambiguity tends to create a series of risk due to improper
information and unclear objectives which result in changes and consequently end up
in claims for EOT and extra costs.
Critical Success Factor (2): Project Documentation and Record Keeping
A key success factor in claims management and substantiation is the project
documentation system and the maintenance of proper records. The better the
documents related to the project are maintained, the easier the task is for the claims
managers to formulate their claims. With the ease of access and availability of the data
needed for substantiation, claims managers can accelerate the process of development
and presentation of the claim to the Employer.

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Critical Success Factor (3): Team Members Role Identification & Awareness
Another important success factor in claims management is the identification of every
individuals role within the project organization. The common understanding is that
claims need to be handled at the managerial level only and that the construction team
have little to contribute.
The misconception of the duties and roles of the team members in claims is
recognized by (Dobbin, 2006) as one of the deficiencies which impact the proper
record keeping of claims. Hence, it is essential for each individual within the
organization of a project to be aware of his duty with regard to claims. The Project
Manager is therefore obliged to clarify to his team the various tasks they need to
complete in order for the potential claims to be well-structured.
Critical Success Factor (4): Monitoring the Work Program
The master program of any construction project is usually referred to as the
baseline program (FIDIC, 1989). A baseline program is very essential since it allows
the program of work to be conveyed to all parties (Keane& Caletka 2008, p.43). This
program includes all the activities which correspond to the project lifecycle.
Furthermore, this program includes what are known as the milestones of the
project. PMI (2008) defines a milestone as a significant point or event in the project.
During the execution of works, any change in a milestone due to a variety of reasons
needs to be accurately monitored and managed. This task is usually assigned to the
planning department, who report such deviations or delays in milestone achievements
to the project management. The importance of monitoring a work program comes as
an essential step so that the reasons behind delays can be duly recorded and used later
to substantiate the claim.
Critical Success Factor (5): Changes and Change Orders
Change and change orders are among the clearest and most common drivers for
the claims submitted by the Contractor. Change orders are approved change order
requests, where the architect and owner have agreed that the contractor is entitled to
an increase in the contract sum (and sometimes additional construction time as well)
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(Winkler and Chiumento 2009, p.188). It is then evident from this definition that
change orders are acknowledged sources of delays and can greatly contribute to the
betterment of a claim and entitlement for time as well as cost. The proper
formalization of changes by the written consent of the Engineer is a crucial success
factor in claims management.
Critical Success Factor (6): Timeliness of Notification
Timely notification of claims to the Engineer and Employer is an essential factor
to be considered at every stage of the project. The Contractors project manager is
thus supposed to conduct periodic reviews of the project progress and convey formally
to the Engineer the intention to claim for either additional time or money or both in
the event in which a cause for a claim arises.
Non-timeliness of notification can lead in many instances to the Contractors
right being denied by the Employer who can simply justify his rejection to nonawareness of the circumstances or events. For this reason, the Contractor is required to
be timely by notifying the Engineer about his intentions prior to submitting his claim.
According to scholars like Bunni (2005), this procedure needs to be done with a
written notification of the delaying event to the Engineer with a copy to the Employer
within a specified period or a reasonable time.
Critical Success Factor (7): The Formulation of the Claim
Once the components of the claim are available, only then can the Contractor
start formulating his claim. The formulation of a well-structured claim is thereafter
the responsibility of the appointed claims specialist or in house claims personnel who
undertake the task of furnishing and substantiating the claim.
Critical Success Factor (8): Strategic Project Management
Strategic project management is probably the foremost of the factors of success to
be considered in any claims management process. This is attributed to the fact that
strategic project management combines project management techniques along with
business or corporate strategy to achieve the overall sought goals of a project (Grundy
and Brown, 2002).This statement can be explained in the context of claims as claims
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which not only have an impact on the progress of the works and internal project
issues, but also have an overall impact at the corporate level and upon the well-being
of the Contractors business affairs.
3.5 Chapter Summary

The conceptual framework chapter has provided an insight into the success
factors which can be considered critical to claims management implementation and
substantiation. It has also reviewed the current practices of construction professionals
whilst handling claims and the setbacks of these current practices demonstrated as the
critical failure factors.
With the foundation created by conducting the literature review, the framework
can be further explored by investigating real life projects and case studies which can
consolidate the concept of claims management and substantiation from the data to be
yielded and analysed in further chapters. Figure 3-2 is a model developed to
summarize how the ideal claims management system needs to perform, by defining
the contractual framework of claims management.
The model is constituted of the inputs to the claims management system.
Following the formulation and presentation of the claim, the claim is then either
settled amicably or not. In the circumstance that it is not settled, the Engineer is
required to prepare his determination of the claim worth. Should the parties concur to
the resolution presented by the Engineer, the claim is then settled. Otherwise, the
claimant resorts to other methods of resolving the dispute with the Employer by either
arbitration, litigation or other known mechanisms. Nevertheless, to explore the model
set in figure 3-2, the concepts represented in figure 3-1 need to extensively reviewed.
Chapter five will explore in further depth the various critical success factors
and critical failure factors identified earlier. This can be achieved through the design
of the interviews to be held and in the type of questions which will be raised with each
of the interviewees.

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Proper Document and

Record Keeping
Early detection of
claims Occurrence
Experienced Project
Team
Amicable
Amicable
Settlement
Settlement
YES
An Enhanced
Claims
Management
System
Timely responses to
causes which result in
claims
Claim
Particulars
Submission
and
presentation
to the
Employer
YES
Arbitration
Litigation
Engineers
Evaluation
NO
Other
dispute
resolution
mechanisms
NO
Professional Planning
Figure 3-2: The Contractual Framework of Claims Management (The Idealistic View Model)

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CHAPTER FOUR METHODOLOGY

4.1 Introduction
Saunders et al. (2009, p.5) define research as something that people undertake
in order to find out things in a systematic way, thereby increasing their knowledge.
The research covering Claims management and substantiation handles managerial
problems faced by construction profession practitioners. Therefore, this dissertation is
intended to increase existing knowledge on claims management practices. The nature
of this dissertation may appear to be exploratory yet it may be followed by descriptive
and explanatory approaches since research design may apply more than one approach
(Fellows and Liu, 2008).
To successfully undertake this research, the researchers focus has not only
been on providing findings that advance knowledge and understanding, but also on
addressing business needs and practical day to day problems incurred by managers
(Saunders et al., 2009). This research uncovers the optimum claims management and
substantiation methods by investigating the current construction industry practices and
problems managers in construction face in the day to day claims handling.
Other primary sources were the use of the qualitative approach by the
researcher who after the initial design of the research was completed, selected as his
investigative tool the approach that yielded the results most effectively. For example,
certain research questions cannot be addressed by using a quantitative approach and
can be more successfully conducted through a qualitative approach and vice versa.
Fellows and Liu (2008 , p.95) state that much qualitative research concerns the
generation of concepts through the researcher getting immersed in the data collected
in order to discover any patterns. With this definition, certain concepts will arise in
this research through field research conducted in real life projects. An attempt will be
made through the methodology used to try and review the projects as cases from
which certain findings can be deduced and conclusions and recommendations can be
drawn on the issue of claims management in the United Arab Emirates.

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4.2 Research Approach

Kothari (2004, p.5) classifies approaches to research into two approaches:
quantitative approach and the qualitative approach. In this research, thequalitative
approach has been considered as the direct approach most suitable to complete the
research. This is attributed to the fact that qualitative research can be sometimes
defined asinterpretive research. The research requires interpretations, and, in fact,
human behavior requires interpretation minute by minute (Stake, 2010).
At the start of any research journey, the researcher needs to have a research
design in situ. The research design is not limited to work plans but goes beyond to
ensure that any gather evidence has to address the questions raised during the
engagement in research (Yin, 2003). Moreover, in order for the research questions and
evidence gathered to be aligned, the research needs to be designed accurately. In this
dissertation, one firm has been chosen as part of the research design process.
However, it was necessary to cover more than one project organization within the
same firm to be able to draw accurate conclusions and consequently generalize as
described by (Yin, 2003).
On the other hand, the exploratory nature of the research topic is another factor
that has made the qualitative approach a more suitable approach than quantitative. The
descriptiveness is attained by finding answers to questions which begin with: Why?
How? In what way? (Hancock, 1998). Such questions are found to be ideal for the
topic explored and described in this dissertation. Queries like what are the current
practices whilst managing claims? Or how can claims management and
substantiation be enhanced? are all samples of questions necessary for this research,
which is why the method of qualitative research was selected as being more
appropriate than the quantitative approach.
Another reason for adopting the qualitative approach was that in qualitative
research, an investigation takes place on peoples understanding, opinions and beliefs
in a raw form which although unstructured yet contains adequate richness of content
(Fellows and Liu, 2008).

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4.3 Case Study Research

A case study can be defined as a strategy for undertaking research which
involves empirical investigations of a particular contemporary phenomenon within the
real life context of that phenomenon by the usage of different origins of evidence
(Robson 2002; Saunders et al., 2009). It is of great importance before engaging in
research to allocate the strategy upon which the researcher will build his methodology.
In this research, the strategy was to use case studies, which allowed for the focus on
understanding the dynamics inhibited in individual settings (Eisenhardt, 1989). The
settings herein referred to are the three projects executed by ABC firm and are the
core of the analysis in chapter five of this dissertation. On the usage of case study,
Fellows and Liu (2008, p.87) suggest that case study approach can be used in four
situations in construction related research and they are
i.
a source of ideas and insights.
ii.
Description of a phenomenon.
iii.
To describe project biography.
iv.
and illustrative anecdotes.

Research methods scholars have explored case study research approaches
extensively by setting further definitions for case study approach. Among those
scholars is (Yin, 2003) who elaborates on the features of case studies by dividing it
into two main features, which are case study as an empirical enquiry and case study as
an inquiry. On the case study as an empirical enquiry, Yin (2003) states that this is
achieved by investigating a contemporary phenomenon by its real life context.
On the other hand, Yin (2003) explains the case study inquiry as coping with
the technically distinctive situation in which there will be many more variables of
interest than data points. The phenomenon described herein is the current practices of
claims management in construction projects and how the handling of claims can be
improved. The cases or interviewees fall under the sub-category of the overall setting
which is the specific project targeted for analysis.

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4.4 The Interviews Structure

The interviews conducted for this dissertation were based on the main
conceptual frame of claims management and substantiation. During the interviews, the
researcher to observe carefully in what can be described as listening, asking good
questions, knowing about the core of the topic of study, caring for the data, doing
parallel tasks, and persevering (Yin,2011).
The questions brought up in the interviews mainly addressed the issue of
claims management and the drivers for claims. Due to the time limitation factor for
each interview, the questions were structured into categories touching on the core of
claims management and with minimal time requirement per interview. These six
categories are as follows:
General Information Questions.
Claims Management Questions.
Claims Substantiation Questions.
Questions Related to the Role of the Engineer and FIDIC.
Record Keeping Questions.
Change and Change Management Questions.
The interviews were semi-structured and held in durations of 15- 30 minutes per
interviewee. The nature of the questions enquired can be clearly seen in Appendix (B)
and was typical in all six interviews held. The advantage perceived during the
interviews was the cooperative spirit of the interviewees and their patience during
each interview.
The interviewees were visited individually in their offices. They strictly advised
the importance of confidentiality, since the information they disclosed was critical and
for which reason, real names were not to be used. The method in which the interviews
were held was on face to face basis for as (Gill and Johnson 2001, p.103) have
observed, the complexity of the information to be elicited necessitated the actual
presence of the interviewer in order for him to explain and elaborate on the more
problematic questions.
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4.5 The Data Collection

The method in which the data has been collected for the research was based on
face to face interviews. This method is considered as a prime source from which
qualitative data is usually extracted for case study research. The data collected was
obtained from ABC firm projects A, B and C respectively. Interviews were held on
one to one basis with two key interviewees in each of the projects. This method of
interviews is considered as non-standardized (Saunders et al., 2009). Table 4-1 clearly
illustrates the interviewees and the respective project(s) they worked for:
Project
Location
Project A
Abu-Dhabi
Project B
Abu Dhabi
Project C
Fujairah
Interviewees
Criteria for
selection
- Project Manager
- Commercial Manager
Direct involvement
Direct involvement
- Project Manager
Direct involvement
- Commercial Manager
Direct involvement
- Project Director
- Contract Manager
Direct involvement
Direct involvement
Table 4-1-Table of the Interviewees
The data collected for this research was obtained at various durations
throughout the research period. Access was given to the required contracts, claims and
other relevant correspondence found valid for the research. Permission was requested
prior to collecting the data from ABC management. The claims submission by ABC
for the three projects was also used as a primary source of data for this research.
The other source of data was the three projects documents. The researcher
made use of the documents obtained from the document control system and FTPs
provided by ABC. Some of these documents are demonstrated in table 4-2, which
classifies the documents retrieved and the level of significance of each to the
researcher:

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ABC Projects Data

The projects contract agreements between the
1Employer and the Contractor
2- The baseline programs for each of the three projects.
3-
The Claim submission for EOT, prolongation and

acceleration
4- Daily, weekly and monthly reports.

The incoming correspondence from the Engineer
and the Employer
The outgoing correspondence to the Engineer and
6the Employer
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Source
The document
control system
The planning
personnel
ABC
management
The document
control system
The document
control system
The document
control system
Significance
High
High
High
Moderate
Moderate
Moderate
Table 4-2: The Documents retrieved from ABC projects
The nature of the problem this dissertation covers is a real life problem. This
fact made literature reviews another rich and valuable source of data for this field
upon which this research strongly relies.Fellows and Liu (2008, p.84) state that in
using real-life problems as the inspiration for research, it is important that this is
done with an understanding of the literature. This is due to the fact that literature
helps the researcher to gain some preliminary, but further, understanding of the issues
relating to the topics, whether they have been investigated extensively already and of
any likely problems (Fellows and Liu, 2008). Nevertheless, a literature search may
also bring together the ideas of others (Lancaster, 2005).
Another significance of literature reviews is at the data interpretation level. The
ideal interpretations will connect the ideas of interest reflected by the relevant
literature with reassembled research data (Yin, 2011). Once the data and literature are
amalgamated, the researcher will come closer to achieving his research aim by
fulfilling the set objectives .This can be achieved through the address of the research
questions raised earlier.

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4.6 Validity and Reliability

Validity, reliability, and objectivity are all core concepts related to criteria in
qualitative research as described by (Flick et al., 2004). Lancaster (2005) defines
validity as the extent to which the data collection method or research method
describes or measures what it is supposed to describe or measure. The first criterion
referred to herein is validity.Yin (2011, p.75) states thatResearchers seek to use
strong designs to strengthen the validity of their studies and to ensure that the data to
be collected properly address the research topic being studied.
In this research, the structure of the interviews and type of questions raised in
this research are essential and consolidate the validity of the research and fall under
the design identified by (Yin, 2009). If the questions of the interview describe or
measure whatever it is intended to measure, then it can be assumed that the research
method is valid. Furthermore, validity may take various forms as described by Yin
(2003) to include internal, external and construct validity.
On the other hand, Lancaster (2005) describes reliability as the extent to
which a particular data collection approach will yield the same results on different
occasions. Reliability is established in this research by ensuring that the interviewees
are properly selected. In other words, the more directly involved in the problem the
interviewees are, the more reliable the data retrieved will be. Interviewees with more
involvement in claims management have more to contribute than interviewees with
less involvement in claims, and therefore they become a vital and primary source of
data. Another source of reliability which was found by Yin (2003) is the use of
multiple sources of data which may include documents and archival records. This can
be found in the archival records of the targeted organization in this research for each
particular project.
Objectivity problems, too, may tend to surface in the research. To avoid such
problems, the researcher plays the role of the unbiased reporter of events, activities or
individuals, (Flick et al., 2004). By reporting events and facts impartially, the chances
of failure will diminish. In other words, the researcher has to distinguish clearly
between fact and opinion to satisfy what is needed to make the research objective
(Dees2003; Saunders et al., 2009).
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CHAPTER FIVEDATA ANALYSIS, RESULTS AND FINDINGS

5.1 Introduction
Lancaster (2005) describes the processes in which data analysis goes through
as the distillation, classification, identification and communication processes.
Accordingly, the three projects which have been examined in this dissertation were
projects recently executed by an international construction company referred to as
(ABC) were subjected to some extent to these four processes of analysis.
Two of these projects were based in Abu Dhabi and the third was based in
Fujairah. The projects referred to have been presented in table 5-1 for clarity purposes
and will be further examined in this chapter:
Project Name
Project Nature
Location
Project A
Convention Centre
Abu Dhabi
Project B
16 storey hotel
Abu Dhabi
Project C
Highway
Fujairah
Table 5-1 ABC targeted Projects
The reason the projects shown in table 5-1 have been selected for this research
is that these endeavours had encountered the occurrence of claims due to
circumstances beyond the contractor (ABC)s will and control. Consequently, the
contractor had to put forward certain claims to ensure both his right for EOT and
additional cost. Another reason for the selection of these projects is the presence of the
researcher on these projects throughout the construction phases, and who was
privileged to access the projects data easily from the management, and this
contributed greatly to this research work.
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Another factor which played a decisive part in the selection of (ABC) as the
focus of this research is that the interviewees were of international backgrounds. This
enabled the researcher to obtain data directly from personnel who not only had
international experience but who also possessed local knowledge of the UAE
construction market and contracts.
The three projects shared certain commonalities which are worth mentioning
prior to the engagement in the analysis. These have been summarized in the following
points:
1- ABC had to claim time and cost in all three projects encountered.
2- All three projects were of considerable financial values.
3- The three projects are categorized as fast track projects since they were initially
intended to be completed in relatively short durations.
4- The Contractor ABC was granted EOT in all three projects.
5- The final costs of prolongation and acceleration measures taken by ABC have
not been agreed or settled up to this date.
With the brief summary of the three projects, the description of ABC firm and
extensive analysis is the next step which will be taken in this chapter.
5.2 ABC Construction Company

ABC Company was founded in the UAE in the year 2000. Its establishment
came as part of the European mother companys vision to commence operations in the
Middle East and particularly in the Gulf region. With over 12 branches worldwide,
ABC successfully launched operations in Dubai and Abu Dhabi as a technical
construction company capable of undertaking projects of variable sizes and features.
Throughout the years between 2000 and 2006, ABC was associated with many
successful projects and this association of the company with state of the art buildings
and mega projects contributed to the enhancement of its reputation in the region. As a
result, ABC expanded in size and human resources to include over 6,000 employees
between staff and skilled labour.
In the period between 2007 and 2011, however, the business expectations for
ABC were not fulfilled as anticipated by the corporate management. This came as a
result to the fact that the company was executing certain projects for miscellaneous
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clients in Dubai, Abu Dhabi and Fujairah which did not meet the expectations of the
majority of the stakeholders.
The projects handled by ABC during that specific period encountered either
cost or time overrun. With the failure to meet the specified deadlines and budgets
allocated for each project, ABC had to maintain its contractual rights for the loss of
time and cost by submitting and presenting claims against the Employers. These
claims demonstrated the contractors entitlement to additional time and cost due to
delays and events beyond ABCs liability. To this date, the claims are under review by
the Employers and the relevant Engineers involved in each project. If the negotiations
with the Employers prove fruitless, the ABC management will be left with no other
options but to proceed for arbitration or other dispute resolution mechanisms.
The analysis sub-sections will demonstrate the procedures the contractor ABC
followed in every individual project. Factual figures related to the claims and how
they were developed will be reviewed along with the feedback collected from the
various individuals involved in the process of formulating and managing the claims. It
is hoped that the analysis summed up with the literature review will contribute
profitably to the current corpus of information and result in the establishment of a
refined form of claims management and substantiation for contractors working in the
UAE. Figure 5-1 clearly summarizes the analysis proceedings in each of the three
projects and the direct source of data in each project:
Projects A, B
and C
The Interviews
Three semistructured
interviews
The Contract
Documents
The terms and

conditions of
the contract
The Claim
particulars
Figure 5-1- The Analysis Procedures
The
substantiated
claim inclusive of
all documents
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Once the data is collected following the procedure illustrated in figure 5-1, the
next step the researcher has to undertake is to categorize the data. Categorisation of
qualitative data may rely on the researchers opinion and objectivity based on
rationality, expertise and experience (Fellows and Liu, 2008).
Following the data categorization, a pattern or a relationship may be expected
from the review of theory and literature (Fellows and Liu, 2008). Yin (2011, p.219)
comprehends that this newly found pattern can become the pillar for creating an
innovative interpretation along with the main theme developed by the researcher.
5.3 Analysis- Project A

The convention centre referred to hereunder as project A is the first project
covered in the analysis chapter. The project can be described as a convention centre
used for the purpose of holding local and international exhibitions and events. The
capacity of the convention centre comprises of four halls and two car parking
buildings. The construction work by ABC commenced in the year 2007, and was
concluded in the year 2009.The facility features can be clearly seen in table 5-2:
Description
1-
Convention halls 6,7,8,9 and 10
2-
Car Park 1 (G+5)
3-
Car Park 2 ( G+4)
Table 5-2: Project A features
The convention centre halls 6-10 were built of steel structure with aluminium
envelope and glass for the faade finish. The halls included areas called the back of
house and the front of house areas. The front of house areas included facilities
dedicated to the organization of events. On the other hand, the back of house areas
were to be used as serving areas and provided with roller shutter doors for the entry of
equipment and machinery. The first storey consisted of what are called the hospitality
suites for the purpose of hosting the VIP guests and the holding of meetings and
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seminars during exhibitions and events. In addition to the complexity of the civil
works, the complex included many sophisticated electro-mechanical disciplines such
as heat exchangers, automated lighting control, building management systems and life
and safety systems.
The original contract value signed between ABC and the Employer was AED
770,000,000.Naturally, this value was not the final value agreed upon at the end of the
project. Other monetary values were added on during the execution phases which
included the EOT claim, costs of prolongation and variation orders.
In project A the Contractor made a total of 7 submissions for extension of time
entitlement. The first submission included a request for 120 calendar days. The
contractor justified his requirement for the EOT due to delays caused by the Engineer.
These delays constitute of the following facts the Contractor formalized during the
end of 2008:
1- Delay in receiving the pile caps which were executed by the Employers direct
contractor and not ABC.
2- Delay in the re-design of the Car Park 2 due to the existence of unforeseen site
conditions which made the old design impracticable.
Initially the Contractor had received 30 days as extension of time which were
estimated as insufficient by ABC management to complete the project in all its
features. Therefore, the Contractor objected in his 2nd submission by emphasising on
the need for 120 additional days. After thorough negotiations with all the parties, the
Contractor managed to obtain 120 days for completion.
The entitlement for time had secured the Contractor against any liquidated
damages or penalties for delay. However, the Contractor realized that the Engineer
had issued in total 720 changes in the form of change orders and verbal instructions.
The Engineer had eliminated the time impact from these change orders. The
Contractor hence was left with no other option but to take acceleration measures to
avoid delays occurrence beyond the agreed extended date. In his third submission, the
Contractor stated to the Employer and Engineer officially that the measures were
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necessary to overcome these continuous delays. In his submission, the Contractor

included an As-Planned Impacted delay analysis which reflected the deviation from
the baseline program and how this had affected the durations.
With the EOT granted, the Contractor managed to complete within 60 days
instead of the 120 days agreed earlier. However, the Contractor believed from a
contractual point of view that he was eligible for the following monetary claims:
1- Cost of Prolongation beyond the original contract expiry date.
2- A total of 120 days of EOT despite finishing earlier.
3- Costs of Acceleration measures taken and were substantiated on the fact that all
change orders eliminated the time impact and acknowledging the cost only.
Finally and in his submissions 4 to 7, the Contractor demonstrated his cost
entitlements for prolongation, acceleration and cost of changes and variation orders.
The documents he relied on were in the following sequence:
1- The general contract clauses.
2- The delay analysis demonstrating the human resources, additional tools, plant
and machinery mobilized to site to recover the delays.
3- The daily, weekly and monthly reports which included photographs and figures
on the daily progress and obstacles faced by the Contractor.
4- Commercial invoices demonstrating the additional cost figures which were
used as appendices for the claims submissions.
To summarize the total costs, the following simplistic formula reflects the costs for
which the Contractor saw himself eligible:
Total= Contract Value+ Cost of Change orders (inclusive of overheads and
profit) + Cost of Prolongation + Cost of Acceleration
For a further elaboration on project A claims and other facts, the two
candidates who will be interviewed are the project manager and the commercial
manager referred to as JR and GH respectively. The positions of the two interviewees
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within the organizational chart of project A can be seen in Appendix (C) and are
considered as senior managers in the project.
5.3.1 Analysis-Case 1-Interviewee 1

JR is a 60 year old male German national. He held the position of project
manager for ABC during the initiation, execution and handover of project A. JR is an
architect by discipline, but has been a project manager for over 10 years in the UAE.
He played a significant role in the claim which surfaced in project A. His good
relations with the Employer and the Engineer contributed to the claim particulars
formulation and build up. JR is not holder of any project management or related
degree. He acquired the knowledge of project management over extensive years of
practice and experience.
JR does not hold any degrees or certificates in project management, but he
developed experience in the field over the years. The projects he managed were all
pertaining FIDIC as a form of contract. His previous projects were mostly based in
Europe and some in Dubai. During his years of experience, he has encountered three
types of claims and they are EOT, acceleration and prolongation claims.
JR was asked to define a claim and he responded by saying, A claim is an
escape from penalties in the event of delays. When asked on the types of claims
encountered in project A, he answered We had an EOT, prolongation and
acceleration claim put in place. JR affirmed that the claim put forward in project A
was not only for the purpose of covering the delays caused by ABC, but were intended
to ensure the rights of ABC for delays caused by the Employer.
With regard to the team members upon whom he relied for the claims
formulation and management, JR was emphatic in his response. He said, I strongly
believe that a good claim greatly depends on a good planner, commercial manager
and of course me: a project manager. He further elaborated by saying We also rely
on a claims specialist whom we pay on an hourly basis to write the claim, by giving
all the necessary input such as the work programs, contract documents ,etc..

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On the rules needed for claims management systems, JR stated I dont think I
can suggest a claims management system to be followed in construction projects. In
this project, we did not follow a certain managerial process other than following steps
we did in previous projects such as notification of delays and monitoring of delays
occurrence,. He further added As you are aware, it was a mega project and needed
to be completed in a record time which made us overlook the claims occasionally
since our target was to try and finish on time.
JR also commented on the errors and mistakes which took place in his project
by saying The problem in project A is that the project was under partnering. In other
words, the client tried to convince us that claim submissions are not necessary and
that we can solve all disputes and claims amicably without the need for writing
letters!!! He then clarified his statement by saying For a period of time we truly
believed that the client is sincere and that we will get our entitlements, especially with
the huge number of changes made on almost daily basis. JR then said I must admit
that our trust and belief that partnering will work almost made us lose all our
additional right for time, cost and acceleration. I sincerely think that it is really
important to record the impacts of changes and delays made by the employer and not
to hesitate in conveying them in writing.
JR strongly believes in certain elements for the successful presentation of a
claim. In this context, he even summarized them as being: a well-written claim and
enough proof and substantiation. However, his comment on this was, It may seem
ideal in words but in practice we have really faced rejection and request for further
clarification because we missed out obvious substantiation elements. These of course
are some of the errors we fell in and which caused a delay in processing and
evaluation of our claim.
The next part of the interview was to ask JR about the substantiation of claims.
As a project manager, JR contended that the delay analysis was one of the most vital
elements needed for substantiating EOT claims. When asked about prolongation and
acceleration, he stated, Clients usually request through their Engineer or cost
consultant to provide supporting documents such as invoices, daily reports or monthly
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reports approved by the Engineer and which demonstrate figures on costs or

manpower size or plant and tools used.
JR also noted that during construction, they tended to neglect taking enough
photographs or keeping track of some of the changes which were directed at site
without written instruction. He said, I think the role of the planning department or
engineer is to daily record the facts and send them officially to the Engineer. Such
documents can be used later on to demonstrate our entitlement and consolidate our
claim. For the presentation of the claims, JR stated that this takes place during
progress meetings, where the key members involved are claims specialist, commercial
manager and planning manager.
The next step in the interview was to elicit JRs appreciation and evaluation of
the Engineers role in the administration process and what his perception was of
FIDIC. When he was asked about the role of the Engineer in claims, JR promptly
answered FIDIC gives the Engineer the right to evaluate the claim submitted to us as
a contractor, but that evaluation at most instances is not accountable when the
Employer has no intention to grant time or cost to the Contractor. In the case of
project A, JR said, The Engineer gave his determination and the client appointed a
3rd party to evaluate the claim. This only means that the client is not happy with his
Engineers assessment, even though I believe the assessment was not fair money
wise. JR also remarked on the Engineers performance by saying The engineer has
not acted impartially in project A, and I dont blame him. After all, he is paid by the
Employer and impartiality may mean clash of interests which the employer is not
paying money for. JR commented too on the fairness and integrity of the Engineer
that, Again I repeat, Engineers are not exercising fairness due to fear and allow me
to call it intimidation, because at the end of the day the Engineer gets his payroll from
the Employer, and that makes a weak Engineer vulnerable. On the suitability of
FIDIC as a form of contract, JR strongly believes that there is nothing wrong with
FIDIC, but the problem is with the people who use FIDIC. He explained this by
saying Employers here tend to be selective, in the sense, they extract certain clauses
which serve the Employer only and use them in the general terms or conditions of the
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contract and they somehow tend to overlook the clauses which protect the contractor,
but that of course is in limited situations.
JR was then asked about the importance of records keeping and management. He
asserted that the most important documents used to formulate the claim are the various
incoming and outgoing correspondence to the Engineer and vice versa. He also
admitted that the document control system adopted was simplistic and was filed in the
conventional way, which meant in hard copy files with a simple excel sheet as a log
controlled by one document controller and an assistant. JR also acknowledged that
this was a rather primitive method, considering the complexity and enormity of data
needed to be recorded for project A. He even commented on this by saying, It is
sometime hard to track certain letters which were sent to the Employer, which is
somehow annoying especially when I have to report back to top management.
However, JR added that the most important files or documents, other than the baseline
program, were kept aside in a separate file in his desk drawer. These included
important notifications and the claim submission.
The final part of the interview held with JR was related to change and change
management. In this section, JR emphatically attributed cost deviations borne either
by the Employer or Contractor to the occurrence of changes. He also stressed that
changes during implementation are more critical and are of higher impact than the
ones at the initiation. Nevertheless, he believed that both types, whether in initiation or
implementation, resulted in claims occurrence.
The main reasons for change occurrence in JRs opinion area poor or incomplete
design, a weak Engineer and a client who doesnt know what he wants at the design
stages. From a contractors point of view, JR stated The more changes occur the
more contractors make money, especially if the changes have considerable value and
time for execution as they are often a winning card. On the impacts of changes, JR
asserted If changes are not managed well by all parties, they may result in higher
risk which will impact the delivery dates and project budget as has happened in
project A. On the other hand, they mean more time and cost for the contractor if he
succeeds to prove his case by presenting a well-established claim.
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5.3.2 Analysis-Case 1-Interviewee 2

GH is a British national of 40 years of age with experience of over 10 years in
construction projects and commercial affairs. He worked as a commercial manager for
a period of only 3 years on project A along with JR. He is considered as a claims
professional although he does not hold a degree in engineering or construction related
disciplines. Furthermore, he does not hold any certificates such as PMP or similar
international accreditations but has attended training courses and seminars in quantity
surveying and dispute resolution in the United Kingdom.
When GH was asked about his definition of claims, he answered without
hesitation Claims are the assurance of right made by the Contractor. He further
identified the types of claims he had encountered in previous projects as being EOT,
prolongation and on some occasions, acceleration claims. In project A, GH
acknowledged that there were three types of claims. Two of these were direct and
obvious and they were the EOT and prolongation claims. However, the 3rd claim was
more complex as it involved acceleration measures to recover the loss of time which
consequently resulted in a loss of productivity claim.
GH denied the fact that the claims in project A were initiated to cover any
delays caused by the Contractor ABC. On the contrary, GH said Project A did not
face any concurrency if that is what you are referring to.GH went on to say For a
fact, I must say that a lot of thanks for the formulation of the claim goes to our
planning department, since their efforts exerted in the delay analysis helped a lot in
the formulation of the claim and I truly believe that the planning team is a very vital
part of the claim process.
In his response to the rules for claims management systems, GH answered that
the best claims management system is the one that identifies the delay and elaborates
on it. Therefore, GH emphasized on the fact of proper delay analysis as a rule of
thumb for any claims management system. GH noted that a claims specialist on board
can also be of great assistance. Furthermore, GH stated that they had perceived certain
errors which were common in all claims he had witnessed in the past. These errors
included lack of substantiation in certain cases of the claim. However, he asserted that
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this did not harm their stance since they provided addendums to the claim.
successful claim presentation as perceived by GH is the one that encompasses the

situations reality without exaggeration, and in this context, he noted Some
contractors tend to exaggerate their figures in hope of obtaining a limit, which even
though is less than claimed yet it is sufficient to cover losses and eventually make the
project profitable.
GH summarized the lessons learnt from project A as being the essence of a
well-established claim. He commented, We have suffered in this project from not
giving in timely notices to the employer. This made things seem normal and that we
were content and more than happy to accommodate any changes made with no extra
time. He further said, Notifications are part of the claim and are integral to keeping
all parties on the same channel; otherwise the consequences will be harsh and when I
say harsh, I mean for all parties.
When asked about the components of proper substantiation for claims, GH
answered simply by saying Accessing all the necessary documents needed whenever
needed easily. GH also believes that such documentation and maintenance of records
needs to be done during the construction phases and falls under the responsibility of
all team members to report any delays or abortive works instructed verbally by the
Engineer or Employer directly at site.GH concluded by saying I sincerely believe
that every construction team member has the obligation to maintain his companys
rights, by merely reporting events and opposing directives the management is not
aware of.
During the interview, speaking on FIDIC and the role of the Engineer, GH
expressed disappointment. In my years of experience in the Middle East, I rarely
encountered an Engineer who acts impartially. There is nothing wrong with FIDIC as
form of contract so long as the administrator of the contractor expresses fairness.
He added, The Engineer has been silent in the case of our claim, which to our
disappointment makes it a challenge for us to argue further with an Employer who is
convinced he owes us nothing but the time he granted us.
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GH agreed that document control and records keeping are very vital and
necessary. He identified the documents essential for the claim from his perspective as
being the baseline program and all incoming and outgoing correspondence. He
emphasized, however, that despite the relatively primitive system of keeping records,
he had no complaint about the accessibility to whatever documents he needed
whenever he needed them.
Change and change management were the final topics in the interview held
with GH. Based on his comments, it was clear that he believed changes indeed
contributed greatly to either increasing the cost or reducing it. GH said Clients may
decide to add features which are a positive variation or may reduce scope which falls
under cost saving or negative variations. He attributed these changes to additional
needs perceived by the Employer in the execution stages which were unforeseen at the
start or to insufficient time given to the designer to complete his design. He further
added that changes during construction are more critical than the ones at initiation.
Nevertheless, changes do have impacts which maybe positive or negative based on the
concerned partys view and definitely are related to claims as corroborated by GH.
Finally GH concluded that project A was granted an extension of time.
However, to date, the claim for additional monies has not been settled or agreed upon
with the Employer. At this stage, the Engineer is no longer involved since his
determination was not agreed by the Contractor ABC. The next step, as GH sees it, is
to proceed with arbitration since the amicable methods of settlement have not
succeeded. The claim in project A as visualized by GH is achievable and he has faith
that the case will be settled in arbitration without resorting to litigation or any other
legal proceedings. His admission of the existence of certain flaws in formulating the
claim has not affected his confidence in the ability of ABC to achieve its entitlements.

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Both JR and GH are project management professionals despite not holding any
certifications in project management or international accreditations. They both enjoy
numerous years of experience in construction projects in the Middle East. While
analysing the general information section of the interviews held for project A, both
interviewees shared a lot of commonalties in their sense of knowledge and the
familiarity with FIDIC as a recognized form used in construction projects contracts in
the United Arab Emirates. Neither of the interviewees has attended previous seminars
or training courses on claims management. However, both interviewees confirmed
their direct involvement in construction claims in project A. The general information
feedback of the interviewees has been summarized in table 5-3 and can be applied to
the other four interviewees in the sections to follow:
General information feedback
1- Experience in management of projects
Interviewee
1
Interviewee
2
2-
International project management certifications or

related degrees
3-
Familiarity with the form of contract followed in

construction projects
4-
Involvement in the construction claims arising in

projects
5-
Attendance of seminars or training courses related

to construction claims
Table 5-3: Project A General Information feedback

No differences materialized during the interviews of JR and GH. Both
answered the questions in very similar contexts. In other words the commonalities
were overwhelming in the responses presented by the two interviewees in project A.

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5.4 Analysis- Project B

Project B was another project executed in Abu Dhabi by ABC. The project by
nature was a four star hotel and constituted of a ground floor and 16 typical storeys.
The owner of the project is a well-known international hotel services provider who
decided to construct this project in fulfilment of Abu Dhabis need for more hotels.
The overall contract value of the project was AED 500,000,000.00. The features
demonstrated in table 5-4 represent some of the aspects of the project which were
retrieved from the project data and plans:
Description
450 Guest Rooms
2 restaurants
3 bars
A swimming pool +Sauna + GYM
2 kitchens
12345-
Table 5-4: Project B Features
The works on Project B officially commenced on the 1st of March, 2007 and
were intended to be finished by the 31st, August, 2009. However, the contractor was
granted an extension of time to finish officially by 24th of October 2009.Similarly, as
in the case of project A, ABC had the gratuity of extension of time, cost of
prolongation and variation orders. The value was then further expanded to include all
the other costs.
The major costs incurred by ABC and demonstrated in their claim were the
costs of prolongation. Some of these costs are represented as follows:
1- Direct and Indirect staff costs.
2- Labour expenses.
3- Cost of prolonged equipment and plant.
4- Head Office overheads.
5- Sub-contractors prolongation costs.
6- Prolongation cost of insurance.
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7- Loss of labour productivity due to the acceleration measures.

The second claim which came in place was the claim related to the acceleration
measures taken by the Contractor. These as asserted by the contractor were initiated
on the basis of 600 different change orders. The immense change orders as classified
by the Contractor resulted in massive delays which in order to overcome, the
Contractor had to take acceleration measures. The changes were major and significant
and involved demolition and re-work which were both time and cost consuming
activities.
Another delay driver identified by the Contractor was the late award of the fit
out and other packages which were believed by the Contractor to have further
contributed to the overall delays. A total of 20 different packages estimated at a value
of AED 30,000,000.00 were awarded at variable time spans throughout the execution
phases of the project. The initiation of these packages inspired the Contractor to have
them included as part of the EOT and acceleration claims as identified changes.
Notwithstanding the profit and overheads margin of 12% which were considered as
net profit, the packages were considered as an obstacle to the timely completion of the
project.
For the proper substantiation of the claim, the Contractor had to present the
various change order logs and documents as part of the claim structure. Other
documents such as the baseline program, impacted program and delay analysis were
also found fundamental for the overall proper substantiation of the claim.
The overall durations granted to the Contractor were sufficient to complete the
project within the boundaries of the EOT. However, the costs of acceleration,
prolongation and change orders were later disputed by the Employer under the alleged
cover of having concurrency of delay and that the contractor had not mobilized
sufficient manpower and resources. This was challenged by the Contractor who
demonstrated the manpower on site during the peak intervals of the project.
The overall organizational structure of the team working on project B is
demonstrated in appendix (D). The interviewees in this project were the project
manager and commercial manager referred to as SH and GV respectively. Their
feedback was taken as part of fulfilment of the analysis of project B.
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SH is the senior Arab project manager, who has been working for ABC for
approximately 8 years. His designation in project B was project manager. He is 50
years old and is a holder of an architectural engineering degree. He has wide
experience, having worked for a total of 15 years in managing construction projects in
the UAE. The projects he has managed range from commercial to residential
buildings.SH was a key interviewee as his experience in managing projects which
incurred claims is of great significance. Notwithstanding the fact that SH does not
hold any international certificate in project management, yet he has attended many
workshops and seminars on claims and mostly LEED training courses.
When SH was asked about the form of contract used in the UAE, he answered
that clients had used FIDIC in all his previous projects. He said, As far as I recall,
FIDIC has been the form of contract used by clients in the UAE and will go on for the
years to come. He also confirmed that he is directly involved with the claims in
project A. SH defined a claim by saying Claims are opportunities to turn a project,
which is under budget, into a profitable endeavour. When he was requested to
elaborate, SH stated that in projects, which are usually under-priced by the contractor
in an attempt to win the tender, once the contract is awarded, changes become a daily
happening which increase the project cost and accordingly, the contractors profit. He
further elaborated by saying In the recession, it was tough to compete with low
bidders. This drove companies to drop their prices in hope that they will compensate
losses or increase margins through change orders and claims. In theory, this sounds
workable but in practice in tends to be risky.
In common with all his previous projects, in project A too, SH identified the
types of claims as being prolongation, acceleration and EOT. He admitted that the
claim ABC had submitted for EOT was partly to avoid LDs and delays for which the
contractor is usually held accountable. However, he stressed the fact that this was
minimal compared to the delays resulting from the Employers change orders and
modifications during execution.
The team SH greatly relies on in the formulation of the claim are his planning
department, technical manager and commercial manager. SH explained his reason for
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selecting these three members. He stated, Claims specialists are fortunately not
technical experts in construction. Therefore, the feedback given from the technical
and planning team is very essential in the sense that they help edit the claim to amend
any mistakes about technical facts. After all, the claim specialist only writes these
facts and at many times is not aware of the technicalities which may produce
ambiguity and errors.
The basic rule SH set for a successful claims management system was for
frequent internal meetings to be held between the various departments involved in the
claim formulation and the site team in order to continuously update and report events
which may not be known to the other parties. In other words, SH stressed that proper
communication channels would enable all parties to contribute their input to the claim.
When asked on the errors he usually saw in the presentation of a claim, SH stated that
they were usually typographical errors and not significant factual events. He went on
to say, I am proud to say that the claim on project B is a successful presentation.
Unlike other projects, mistakes and errors were minor and negligible. The lessons
SH learnt from project B were that changes and change orders need to be documented.
He says The moment the Engineer makes a verbal directive we immediately confirm
it in writing to maintain our rights for time and cost.
A properly substantiated claim as SH sees it is the claim which includes clarity
in its body and therefore does not permit the reader or the assessment team to question
the facts recorded. In other words, wherever there is a fact mentioned, it should have
supporting documents such as notices, instructions or analyses. SH affirmed again that
his technical and planning team, along with the hired specialist, were the key team
members who contributed to the proper presentation of the claim.
The role of the Engineer in SHs opinion did not differ much from those of the
previous interviewees. He simply noted that the Engineer is a helpless entity where
claims are concerned. This leaves the Contractor alone with the Employer to battle for
his rights. However, where granting EOT is concerned towards the end of the project,
the Engineer consults with the Employer and grants the Contractor the time. Money,
on the other hand, is never settled earlier but takes more time to negotiate beyond
completion of works, according to SH. On the question of impartiality, SH noted that
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throughout his years of experience, impartiality was never synonymous with FIDIC.
He amplified this by saying FIDIC may call for an impartial and fair Engineer, yet
the circumstances usually work opposite wise. SH believed that certain clauses in
FIDIC which indemnify the contractor need to be amended, especially when these do
not serve the contract but serve one party against another.
On the subject of documents and record keeping, SH had little to say other than
expressing his satisfaction in being permitted full access to whatever document he
needed. According to him, documents can be found any time, whereas the contents of
these documents were of greater significance to him. The documents identified by SH
as being most critical for the claim formulation and submission was the delay analysis
method and the supporting documents for each fact aside.
SH identified changes and improper change management as a significant
contributory factor to cost escalation in construction projects and particularly in
project B. He also pointed out that changes post contract award are also influential
whether at initiation or during implementation. Whilst talking about the drivers for
change, SH immediately held the Engineer responsible for the occurrence of changes,
claiming Engineers are more commercial nowadays and seek to take over as many
projects as they can, regardless of the quality of design they can deliver. SH directly
linked claims to changes. He defended his position by saying With change comes
delay and with every delay there is a claim. The interview was completed when SH
asserted with a smile, Changes are the best encounters a contractor can use to
defend his contractual position and earn some more money.
SH concluded the interviews by saying that despite the disputes due to the
occurrence of claims, the relationship of the Contractor with the Employer remained
normal. Communication is on-going between ABC and the representatives of both, the
Engineer and the employer, at the moment of writing. SH even stated I dont sense
any kind of enmity or hostility between us; on the contrary, meetings have always
been professional when talking on the claims, even though they are not fruitful and
satisfactory to us in ABC.

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Interviewee 2 in project B was GV who is a 57 year old male working for ABC
for almost 4 years. GV, who is a British national, holds a degree in quantity surveying
from the UK. He acquired knowledge of claims through continuous involvement and
practice in construction projects worldwide. He has served in the UAE for almost 10
years, having worked with other professional contractors based in Abu Dhabi. GV was
the commercial manager for project B and the person who contributed to the
formulation of ABC claim in this particular project. GV does not hold any certificates
related to project management but has attended several courses in quantity surveying
and commercial management of construction projects.
GV defined claims as the guarantee for the contractors rights. In his past
experience, GV had encountered prolongation, EOT and acceleration claims. He
pointed out that these three have occurred in project B as well. GV added that the
claims were the direct result of delays caused by the Employer and the Engineer and
had nothing to do with delays by the Contractor.
The team GV usually sees as essential for claims formulation are the
commercial manager, project manager and the planners . He feels that the three are the
key personnel who contribute most to enhancing the claim as a position, in addition to
the presence of a claims specialist. However, GV feels that despite all the parties who
are involved in the claim preparation, mistakes and errors continue to occur. The
examples of errors he gave were mostly related to lack of substantiation of certain
elements of the claim and in some instances, certain contradictions.
The lessons GV feels he has learnt from project B are mostly related to the
necessity of having change orders documented. He clearly mentioned that in order to
manage claims well, changes have to be noted down and recorded. He affirmed,
Some of the mistakes we committed on project B were not to document some of the
major changes. I am surprised how the site team sometimes accept to change certain
features at site without at least referring to their management. This really does harm
more than benefit although it may seem as a gesture of good intentions.
When GV was asked about the proper elements of claims substantiation, he
promptly answered I guess everything we consider as not important at a certain
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stage of the project, turns out to be of significance to our claim. I cannot specify those
documents, but can say that they are of a considerable quantity. On the claim
presentation, GV added that the role of presenting the claim largely falls on the
shoulders of the claims consultant and the commercial manager. He also contended
that the project manager was a key player since he was the overall manager in the
project and was empowered by the senior management.
The interviewee was then asked questions on the role of the Engineer and on
his stance on FIDIC. GV felt that the Engineer had not been granted enough power by
the Employer in project B. He said, Although FIDIC gives the Engineer
administrative powers, yet in reality the Engineer is not practicing his full authorities,
I feel that the Engineer in our project is a document controller who passes our letters
up to the Employer and vice versa. Other than that, I have not sensed a true effective
presence for the Engineer. GV further asserted that the FIDIC is a relatively
reasonable form of contract if it were applied as whole and not in partial chunks
according to what suited a partys interests.
GV expressed his annoyance with the document control system in practice. He
felt that the system was slow and certain letters which had to be sent to the Employer
were sometimes delayed for trivial reasons and that delay sometimes extended over a
period of several days. He also expressed his frustration at not being able to find
documents in soft copies. GV said, I wonder why we cannot have all letters provided
in soft copy on a server reachable by certain parties to maintain privacy, instead of
having to look in bulky files which are wastage of time and sometimes paper.
The interviewee then spoke about change and change management. He found
that change was of very high significance and a direct cause of cost rise in
construction projects. GV also saw changes as significant whenever they occurred,
whether at initiation or during construction. He found that the occurrence of change to
a deficiency in understanding by the Employer to his needs in not giving sufficient
time for the design completion and to the fast track nature of the project which made it
inevitable for changes to surface. In conclusion, GV linked changes to claims and
found that changes in most cases were beneficial from a Contractors perspective
since they were acknowledgements by the Employer of delays on his part.
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Both interviewees in Project B expressed their understanding of claims and the
various types of claims they had witnessed on the project. On the elements of claims
management, both SH and GV agreed on the majority of the elements. Both
participants concluded that dependency exists for planning, commercial and 3rd party
specialists while formulating claims. Conversely, the interviewees did not agree on
two aspects which were the accessibility of important documents in a timely manner
and timely notifications of the occurrence of delays. SH saw these aspects as crucial to
claims management. However GV did not mention them as being essential. Another
difference noticed was with regard to the usage of claims to cover delays. GVs view
was that claims are used by contractors to cover delays. On the other hand, SH
disagrees by assuming that there were no delays by the contractor.
SH and GV agreed that FIDIC is a suitable form of contract. Both expressed
their dismay on the role of the Engineer. Both contended in the interview that
Engineers were not assessing claims the way they were supposed to. They perceived
the Engineer to be biased and not acting impartially in administering the contract.
SH attributed the occurrence of changes in the project to poor design. However,
GH saw fast tracking, poor design and lack of clarity on the objectives by the
Employer as the main drivers for change. With respect to the period in which change
is more effective, both interviewees agreed that changes are significant whether made
during or pre execution stages. Change was seen as beneficial by both interviewees
and was directly linked to claims.

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5.5 Analysis- Project C

Project C is the last project of review in the analysis chapter. The project, a
highway interconnecting two of the UAEs Emirates, was envisioned for the purpose
of saving commuting time between Fujairah and another Emirate. The overall project
was 20 kilometres of four carriageways per side and two bridges.
The overall contract value of the project was AED 440,000,000.00. The project
was a highway constructed in Fujairah which interconnected it to other Emirates.
Project C was governmentally funded. The project is considered as vital to the UAE
since it saves commuting time from Fujairah to the neighbouring Emirates.
The contract signed by ABC and the Employer was a re-measurable contract.
In other words, the Contactor was paid on measurement and quantity based on preidentified rates for each activity or item through what is known as a Bill of Quantities
(BOQ). During initiation, certain elements of the highway needed re-design to due to
the fact that the Engineer had not taken into consideration existing utilities clashing
with the intended route of the highway. In this event, bridges had to be reshaped to
provide the clearance required by the authorities managing the utilities.
The process of re-design took a period of 30 calendar days. Consequently, this
delay resulted in the ultimate deviation of the completion dates. Project C was
executed throughout the years 2008 until the end of 2011.The intended time of
completion was July, 2011. However, due to the re-design process, ABC encountered
excusable delays which lead to the alteration of the completion date to March, 2012.
The Employer acknowledged the EOT claim tendered by ABC to grant an additional
period of eight months for completion of works. However, there were no acceleration
measures undertaken by the Contractor. In summary, the total of what the contractor
actualized as being his right are seen in the simple formula below:
Total = Contract Value + Prolongation Costs + Cost of Additional works
The personnel who were interviewed in project C are JK and PM, whose combined
feedback was used to support the findings in the analysis of project C.

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5.5.1 Analysis-Case 3 Interviewee 1

JK is a 63 year old male civil engineer, who is an Italian national. He has been
working for ABC for over 30 years in their projects in Europe and the Middle East. JK
holds the designation of project director for project C. His input was very vital for the
claim presented by ABC, since he contributed many of the vital facts and incidents to
the claim. JK does not hold any certificates in project management but is very well
known for his achievements in ABC.
When JK was asked to define a claim in his own words, he said I see a claim
as a way to intimidate the other party and a way to waive any attempts for penalties.
The various claims JK has handled throughout the years of work in construction
projects were prolongation, acceleration and EOT claims. JK noted that the claims
present in project C were EOT and prolongation only. He acknowledged that no
acceleration measures were taken to speed up the works since the Employer had not
consented to the concept of acceleration measures. JK denied that the claims were
used to cover any kind of delays due to the Contractors fault. On the contrary, JK
says We did not encounter any concurrency despite what the Engineer or the
Employer says. Hence, all delays are accountable for by the Employer.
JK asserted that the team he usually relied on in project C was the contract
manager and the 3rd party specialist. JK said Actually we had two consultants to
evaluate the value of claim. JK elaborated that sometimes it is better to have a
specialist in claims for the submission and presentation of our claim. According to
his point of view, a successful claims management system should include people with
good negotiation skills. They should be people who are also experienced in
contractual matters and have good planning skills. JK added, For the presentation of
a claim, I truly believe that the person who is going to present should have previous
experience in handling claims.
JK admitted to some mistakes he saw serious in the project. He contended that
these mistakes included poor site management, with the site team accepting changes
free of charge, out of intimidation by the Engineer. JK said The cost may not be as
important in such situation as much as proving sources of delays and parties
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responsible for these delays. JK further stated that the lessons he learnt from project
C were not to accept the indemnity of design by submitting proposals. He elaborated,
The Engineer has requested us to submit design, stating that it is our obligation to do
so. I must admit that I accepted initially out of good intentions. However, in future I
will not accept to have my team designing on behalf of the Engineer because that only
covers delays resulting of design errors.
On claims substantiation, JK stressed on the fact that well written contractual
letters during the construction phases were of great importance. He jokingly added A
letter a day keeps the Engineer away!!! JK felt that recording facts is compulsory for
the proper substantiation of claims. Once the claim is fully substantiated, he
explained, I along with my contract manager usually do the presentation; sometimes
we seek the assistance of the higher level management in order to attract the care of
the Employer to the seriousness of the claim.
JK discovered that the Engineer was helpless where the claims were concerned.
He added, I dont blame the Engineer. After all, he overpowered by the Employer.
JK greatly felt that Engineers did not act impartially due to the pressures exercised by
the Employer. He expressed his frustration on the way the Engineer had
underestimated the claim submitted by ABC, by simply changing facts and denying
instructions made directly at site. On FIDIC, JK said that FIDIC had been the form of
contract used in all his projects in the Arab world, and that he was comfortable
working under a FIDIC contract.
On the records keeping issues in the project, JK did not reveal any discontent with
the system they followed. He stated that the documents he needed were simply
available in soft copy on the IT server. However, he noted that certain documents
were not available due to privacy issues and those were the claim submissions,
addendums, etc.
The last area of discussion with JK was the change and change management issues.
JK found that changes during construction have more significant impacts, since they
take place during the hustle of trying to cope with the tight schedules. He also
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affirmed that cost and change have a proportional relationship, whereas change and
time have an inversely proportional relationship. JK attributed the occurrence of
change to incomplete design and lack of clarity of the Employers objectives. JK
emphatically linked claims to changes by saying Changes are the number one cause
of claims and are at a few times a bonus to us. He believed that change orders had
helped a lot in adjusting the projects turnover, especially since the rates in this remeasurable contract were low.
JK concluded on the disputes which had occurred and attributed them to the nonacceptance of the Employer to the contractors claim. He said that towards the middle
of the project, he could sense isolation and alienation as there were fewer interactions
with the Engineer and the Employer. However, he ended the interview by affirming
that claims in the past had caused tension and stress amongst all the concerned parties.
In the case of project C, the only advantage JK perceived was the additional time
granted under EOT to complete the project.

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The second interview held in project C was with PM who is a 37 year old
contract manager. PM is an Australian citizen and has been working for ABC for 2
years only. He has six years of experience in managing contracts. During his tenure in
ABC, PM was the member who assisted in writing the claim, along with JK and the
project director. PM is considered by ABC as the claims professional since he has
undertaken many courses on claims substantiation.
PM defined a claim as a formalization of the contractors rights for time and
cost due to circumstances not controlled by the Contractor. He has experienced all
kinds of claims in the past and acknowledged the presence of EOT and prolongation
claims in project C. PM admitted that on certain occasions, the contractor used tools to
cover failures, but in the case of project C, he felt that the majority of delays were as a
direct result of changes and incomplete design. PM defined the team which is
indispensable in the management of claims and who are key personnel in formulation
of claims as people who combine good technical backgrounds with good managerial
skills. These people according to him are the project director, construction manager
and the planner. In addition to these members, PM identified the significant role
claims consultants play. PM said Claims consultants have become an essence in
claims formulation for the contractor and are no longer considered as a luxury.
The interviewee went on to say that they had made errors in project C and
encountered delays in the claim formulation. He attributed this to the lack of periodic
meetings to identify the problem and to get feedback from all the members who were
directly involved, whether at the managerial level or the site level. On the other hand,
PM asserted, the claim presentation was successful since the presenters were skilled
and professional individuals.
PM further contributed his views on claims substantiation by saying that a
well-structured claim is the one that comprises all the necessary ingredients that touch
at the core of the topic by being convincing to the Employer. PM did not see the
Engineer as playing the role he was intended to play. He even asserted that Engineers
do not act impartially as required by the contract. In other words, the judgment of the
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Engineer is thus found null by PM. Notwithstanding the fact that PM expressed
satisfaction with FIDIC, he suggested that certain refinements could be made which
would be more fair to the Contractor. An example PM gave was the authority of the
Engineer to issue change orders without consideration to time. PM feels that such
clauses which give an unlimited blanket to the Engineer should be amended to allow
for the Contractor to give feedback on the impact of change prior to engagement.
PM continued to emphasize on the need to have proper records systems and
databases which could be easily accessible. He said that It should be easy to find a
sophisticated yet a simple way of obtaining records and protecting them from loss. We
do have all the letters, notices and claim documents in electronic format. However,
they need to be sorted out orderly for anyone in need to fetch them out quickly.
Interviewee 2 linked change to increase in cost of the project. He further noted
that the changes made in the execution stages were more influential than the ones at
initiation since the control over change lessens due to the fast track and attempts by
the Contractor to complete by the given deadlines. Consequently, PM found that
changes are a number one driver for claims since they contribute to the occurrence of
abortive works, additional works and re-work. Nevertheless, the costs which get
escalated were seen as an advantage for the Contractor to compensate any losses in
profit, by presenting a claim for additional costs and overheads.
Finally, PM commented on the isolation the Contractor was put in project C.
He agreed that the claim was indeed the source of isolation and dispute with the
Employer. The Engineer, too, was not very helpful and perceived by PM as a stagnant
body with no power other than the supervision of the works and the quality of works
only.

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In Project C, JK and PM expressed their full understanding of claims and the
various types of claims they had witnessed in the project. Their experience also
reflected their general knowledge on the issues of contractors claims. On the
elements of claims management, both JK and PM agreed on the majority of the
elements. Both candidates concluded that dependency exists on commercial and 3rd
party specialists while formulating claims. Conversely, the interviewees did not agree
on two aspects, namely, the accessibility of important documents in a timely manner
and timely notifications to the occurrence of delays. JK saw these aspects as crucial in
claims management. However, PM did not mention them as being essential. Another
difference noticed was with regard the usage of claims to cover delays. PMs view
was that claims are used by contractors to cover delays. SH disagreed by asserting that
there were no delays by the contractor.
JK and PM unanimously agreed that FIDIC is a suitable form of contract. They
found no flaws in FIDIC as the form used but they showed disappointment in the role
the Engineer had played in project C. Both contended, as the other interviewees had
done earlier, that Engineers do not assess claims as they were supposed to.
Furthermore, they perceive the Engineer to be biased and not acting impartially in
administering the contract. They did not have high expectations of the Engineers
resolutions, since they solidly believed that the Engineer had not exhibited impartiality
in judgment.
JK attributes the occurrence of changes in the project to the lack of clarity on
the objectives of the project by the Employer and to poor design. On the other hand,
PM sees fast tracking as the main driver for change. With respect to the period in
which change is more effective, both interviewees agreed that changes were more
influential at the execution stages. JK and PM also agree that changes in projects were
seen as beneficial and were directly linked to claims occurrence.

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5.6 Cross Case Analysis

Upon completion of all the interviews with all six interviewees in the three
projects, it becomes necessary to conduct a cross case analysis. The cross case
analysis is then the next essential step since the attention on the assertions common to
most or all of the cases is what case researchers seek (Stake,2010). From the cross
analysis certain commonalties and differences can be derived. These can then be
compared to the literature conducted in chapter 2 and checked in the context of the
conceptual framework developed for this dissertation in chapter 3.
5.6.1 Identified Similarities

The case study analysis and the cross case analysis have conceived a group of
similarities shared among all interviewees. One of the first aspects of commonality
among the six interviewees is that all the interviewees are construction professionals
who have worked in projects in the UAE and abroad. All candidates expressed their
familiarity with claims and the various claims they encountered in their previous
projects.
The three projects had one or more claims specialists to assist in evaluating,
formulating and presenting ABCs claims. All the interviewees stressed the fact that it
is important to have an experienced specialist to help consolidate the claim.
Additionally, the majority of them expressed that the commercial, planners and
project team are key personnel involved in the claims management process.
The six interviewees expressed their awareness of the necessary documents
relevant for the claims formulation. The three projects included document control
systems, and records were kept regardless of the interviewees agreement on the
appropriateness of these systems or their workability in relation to claims
management.
The interviewees unanimously agreed that the role of the Engineer in
assessment of the contract and the claim was the least of their concerns. The Engineer,
as they pointed out, is either powerless or biased in the favour of the Employer. In
both situations, they sincerely believed that the Engineer acted only on the supervision
of the works and was directed by the Employer to serve the latters interests. There
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was a lack of fairness and integrity in the assessment of their claims, according to all
the interviewees, since the claims have not been settled or agreed upon to date with
the respective Employers.
The use of FIDIC as a form of contract was found suitable by all the
interviewees. However, their consent was conditional inasmuch the application of
FIDIC was fairly observed to serve all the contract parties rather than to serve the
exclusive interests of the Employer.
On the issue of change and change management, all the interviewees attributed
the increase in project costs to the occurrence of change. They further agreed on the
fact that changes during implementation have more substantial impacts on the overall
project than changes that occur during the initiation phases of a project. The majority
of the candidates attributed the occurrence of change to the poor or incomplete design
provided by the Architect. However, the existence of change in construction projects
was also found by the interviewees as beneficial and a source of increased turnover for
the Contractor.
5.6.2 Identified Differences

The differences identified at the cross case analysis level were found to be few.
The first identified difference was that only half of the interviewees found that delay
analysis is an integral part of claims substantiation.Three of the interviewees
considered the occurrence of changes to be influential at the initiation stage of a
project only, while others found it to be influential during execution or at both stages.
Another difference realized in the analysis was the lessons learnt section where each
of the interviewees contributed to different lessons learnt, as can be seen in table 5-9.
Furthermore, tables 5-5 through 5-8 summarize the responses of all
interviewees in projects A, B and C clearly. The tables were developed from the
relevant questions raised during each interview.

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5.7 Chapter Summary

This section represents the results and findings concluded after the data
analysis and the cross case analysis are compared to the literature and the critical
success and critical failure identified in earlier chapters. These are summarized in
tables 5-10 and 5-11 respectively. In table 5-10, it is evident that the critical success
factors (1), (2), (5), (6), (7) and (8), as identified in chapter 3, were in accordance with
the literary findings and interviews outcomes. On the other hand, the researcher
believes that critical success factors (3) and (4) were not emphasized in the literature
or the interviews, despite being key success factors in the conceptual framework.
Therefore, they may be included as part of the recommendations for claims
management systems.
Conversely, the researcher had highlighted certain critical failure factors
demonstrated in table 5-11. These, along with the supporting literature, reflect the
importance of awareness of failure factors in managing claims by Contractors. Hence,
they are emphasized in chapter 6 as part of the conclusions. Critical failure factors (2)
and (3) relate to strategy and team weaknesses, both of which were not reviewed
adequately in the literature or in the interview structure. The researcher feels that the
lack of a clear strategy and team weakness are contributors to failure of claims
management, resulting in unsuccessful claims and loss of the Contractors
entitlements.
To conclude this study, the researcher opts to include strategy and team
awareness in chapter 6 as identified factors of strength for any claims management
systems. However, these findings and assumptions will be applicable only to projects
in the United Arab Emirates and are not to be globalized.

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Project A
Identified Claims Management Elements (Virtues and Deficiencies)
12345678910111213141516171819-
Interviewee
1
Interviewee
2
Awareness to claims as a concept
General understanding of the various types of claims
Familiarity with FIDIC as a form of contract in construction
projects
Involvement in the construction claims arising in projects
Usage of claims to cover delays caused by the contractor
X
Understanding of the claims in each project
Dependency on the Project Manager for claims formulation
Dependency on the Planning engineer for claims formulation
Dependency on the Commercial manager for claims formulation
Dependency on 3rd party claims specialists for claims formulation
Timely notifications to delays occurrence
X
Suitability of FIDIC as form of contract to be used in UAE
X
Accessibility of important documents in a timely manner

X
Understanding of a successful Claims management system

X
Admittance to occurrence of errors and mistakes in claims
Proper presentation of the claim

X
Delay analysis an integral part of claims substantiation
Proper register of events during construction
X
Presence of disputes, alienation and hostility
X
Table 5-5: Summary of Claims Management Elements

Project B
Project C
Interviewee
1
Interviewee
2
Interviewee
1
Interviewee
2
X
X
X
X
X
X
X
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Project A
Role of the Engineer and FIDIC
1234-
The significance of the Engineer in administering of the contract

The significance of the Engineer in the Claim assessment
The Impartial role played by the Engineer
Fairness and Integrity practices of the Engineer
Project B
Project C
Interviewee
1
Interviewee
2
Interviewee
1
Interviewee
2
Interviewee
1
Interviewee
2
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
Table 5-6: The Role of the Engineer and FIDIC
Project A
Record Keeping
1234-
Awareness of the key documents needed for claims formulation

Availability of a document control system
Accessibility of important documents in a timely manner
Awareness of the official notifications and recording of events
Project B
Project C
Interviewee
1
Interviewee
2
Interviewee
1
Interviewee
2
Interviewee
1
Interviewee
2
Table 5-7: The Aspects of Record Keeping

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Project A
Identified Change and Change Management Elements
12345678-
Awareness of the Impact of Change on the project costs

Changes of significance occur pre-implementation
Changes of significance occur during execution
Change of design is one of the causes of change
Lack of clarity is one of the causes of change
Fast tracking is one of the causes of change
Claims are directly linked to changes
Change is beneficial to the Contractor
Project B
Project C
Interviewee
1
Interviewee
2
Interviewee
1
Interviewee
2
Interviewee
1
Interviewee
2
X
X
X
X
Table 5-8: Identified Change and Change Management Elements

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Project
Interviewee
1-
Project A
JR
2-
Project A
GH
Importance of formal notifications

Recording the impacts of changes and delays in
written
Importance of proper substantiation
Frequent meetings and open channels of
3-
Project B
Summary of lessons learnt
SH
communication are an essence of claims

management
4-
Project B
GV
5-
Project C
JK
6-
Project C
PM
Non acceptance of change without formal

notification
Importance of periodic meetings to review the
claim status
Table 5-9: Summary of Lessons Learnt

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Author
Arditi, D. and Patel, B. (1989). Expert
Dependency of claims occurrence of system for claim management in
1construction projects. Butterworth & Co
change at the initial stages of a project
(Publishers) Ltd Vol. 7 No 3.
ID: 110159
Corresponding CSF
Reference
Project Initiation Phase
CSF1
Jergeas, G., PE and Hartman, F. (1994).

Contractors Protection Against
A majority of agreement on the importance Construction Claims. AACE
2of maintaining records
International Transactions
ABI/INFORM Global pg. DCL 8.1.
Project Documentation and

Record Keeping
CSF2
No clear role displayed on assigning tasks

to team members
4- No clear identification
Team Members Role

Identification & Awareness
Monitoring the Work
Program
3-
Part of lessons learnt by the interviewees

demonstrated in table 5-9.
5- Unanimous agreement on the linkage of
claims to changes and change orders by the
interviewees
Identified by
6- significant
few
interviewees

CSF3
CSF4
Han, S., Love, P. and Feniosky, P.

(2011). A system dynamics model for
assessing the impacts of design errors

in construction projects. Mathematical
Changes and Change

Orders
CSF5
and Computer Modelling.
The FIDIC Forms of

as Bunni, N. (2005).
rd
Contract
3
Edition.
Blackwell
Publishing Ltd.
Timeliness of Notification
CSF6
101
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ID: 110159
Keane, P. J. and Caletka, A. F.

Agreement on the formulation of a claim (2008).Delay Analysis in Construction
7Contracts. A John Wiley & Sons, Ltd.,
importance as part of
Publication.
Grundy,
T.
and
Brown,
L.
(2002).Strategic Project Management
No clear reference to strategy by the Creating Organizational Breakthroughs.
8Published by Thomson Learning,
respondents
Berkshire House.
The formulation of the

claim
Strategic Project
Management
CSF7
CSF8
Table 5-10: Critical Success Factors versus Literature versus Interviewees Feedback
Identified Elements by Interviewees
1-
Author
(Molly, K. (2007). Six Steps for
Corresponding CFF
Reference
Ignorance of Change and

Change orders
CFF1
Lack of Strategy
CFF2
Team Weakness
CFF3
Admittance to the importance of changes Successful Change Order Management.

and change orders
Cost Engineering, Vol. 49 No. 4
No reference on the cruciality of lack of

strategy
No implication to team weakness but to team
awareness to the non-acceptance of gold
3plating, scope creep and immediate need for
reporting
2-

102
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4-
Agreement on the role of planning
5-
No detection of concurrency by majority of

the interviewees
6-
7-
Winch, G. and Kelsey, J. (2005).What

do construction projects planners do.
International Journal of Project
Management 23 pp. 141149.
Rider, R. and Long, R. (2009).Analysis
of Concurrent /Pacing delay. Published
by Long International Inc.
ID: 110159
Poor Project Planning
CFF4
Concurrency of Delays
CFF5
Gold plating and Scope Creep
Project Management Institute (2008). A

guide to the project management body
of knowledge (PMBOK Guide)
Fourth Edition. Newtown Square: PA:
Author.
Gold Plating and scope

creep
CFF6
Consentient agreement by the interviewees

on biased Engineers
Bunni, N. (2005). The FIDIC Forms of

Contract 3rd Edition. Blackwell
Publishing Ltd.
A Biased Engineer
CFF7
Improper claim
formulation
CFF8
Improper formulation of claims results in

8- rejection of the claim as asserted by a few of
the interviewees
Gibson, R. (2008). Construction Delays

Extensions of time and prolongation
claims.Published by Taylor & Francis
Group.
Table 5-11: Critical Failure Factors versus Literature versus Interviewees Feedback

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CHAPTER SIX CONCLUSIONS AND RECOMMENDATIONS

6.1 Conclusions
Yin (2011, p.220) states that the preferred logic is that the conclusion(s) be
connected both to the preceding interpretive phase and to a studys main data or
empirical findings. One of the key criteria of any research success will be whether a
set of clear conclusions drawn from the data collected exist (Saunders et al. 2009,
p.32).
Likewise, the conclusions for this research have been deduced after the analysis of
the three cases represented in the projects executed by ABC Construction Company.
Furthermore, the data and documents obtained from ABC document control system
performed as secondary sources of data which helped draw the following conclusions:
1- There is a lack of consideration given to the importance of proper record
keeping and documents management, which in many instances, leads to loss of
valuable information and therefore, to the loss of entitlements of the contractor.
2- Change is not managed in the appropriate manner which contributes to loss of
rights, scope creep and improper record.
3- If well managed, change can be beneficial to the Contractor in his claim by
recording them and accepting written changes only by the party which has
power to issue them under the contract.
4- An existence of high dependency on 3rd party specialists for claims
management and substantiation. This is attributed to the fact that specialists
have more experience than other practitioners in preparing and negotiating
claims.
5- Engineers, on most occasions, in the three projects were not acting impartially
as specified by the contract, resulting in alienation, hostility and disputes.
6- Lack of proper substantiation of claims can result in high expenditure through
deputing 3rd party consultants in claims and delay in the processing of the
claims of the Contractor.

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7- Project managers are often not fully aware of the procedures needed to develop
claims. This may be attributed to the fact that few of project management
professionals attend trainings on claim handling process and management.
8- Lack of awareness tends to spread and is manifest among other team members
within the Contractors organization. This greatly contributes to forming states
of ambiguity and loss of sense of direction.
9- FIDIC is identified as the known form of contract used in the United Arab
Emirates to formulate construction contracts between Employers and
Contractors.
10- Non settlement of claims in an amicable manner leads the parties in most cases
to resort to dispute resolution mechanisms such as arbitration or litigation.
6.2 Recommendations
Recommendations are practical suggestions that must be made feasible and
not blue sky ideas (Greener, 2008).The recommendations set out for this research
have been derived in a manner which makes them feasible, tangibleand can be
acquired as steps and procedures project managers and construction claims
practitioners may follow in order to manage and substantiate their claims.
Furthermore, this study was conducted in the United Arab Emirates and the
recommendations maybe generalized to an extent to construction projects within the
same industry in the UAE:
1- The need to establish a proper record management system, which acts as a
backup to the document controller, who on his part may retrieve documents
easily and whenever needed.
2- Early and formal notifications of delays to the Engineer and Employer are
necessary since contract forms call for the necessity of timely notifications.
3- The level of awareness of the effects of changes and especially of unreported
or unrecorded changes needs to be increased. This can be done by
implementing management of change and identifying risks that may be
associated with all types of changes.
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4- Establishment of enhanced planning by allowing for consolidated and

influential planning departments which act as advisors to the Project Manager
and perform as a source of alert in the event of delays caused by the Employer
or Engineer.
5- Continuous monitoring of the baseline program to ensure that no delay is
caused by the contractor. By neglecting this, concurrent delays may surface
and result in the loss of additional costs for excusable delays.
6- The Contractors Project Manager has to establish a strategy on how claims
need to be handled once they arise. This can be achieved by involving key
personnel in the project in the process of Claim Handling Processes as well as
continuous reporting to senior corporate management.
7- Refutation of scope creep (PMI, 2008) and gold plating in construction projects
as they do not allow for time and cost impacts and thus may result in loss of
right.
8- Top management support to the project manager is greatly needed to further
assist to maintain his project in the right direction.
9- Avoidance of alienation, disputes and sources of reciprocal hatred with the
Engineer and the Employer are found to be necessary in claims management.
This can be achieved by keeping channels of communication and negotiation
open at all times.
6.3 Limitations of the Study

The research was generalized as it was based on three projects only and was
based on case study approach. Better results would have been achieved if the sample
targeted had been larger. Another limitation is the one identified by Kothari (2004) as
being the danger of false generalization which is always there in light of the fact that
no standard rules were followed in the collection of the data and only few cases were
examined. However this research was based on three case studies and conclusions can
be applied to the same cases or similar case in situation.
Furthermore, the research encapsulated the process of claims management and
substantiation from a managerial approach. It would be recommended to complement
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such a research with a construction law view by going further into the concepts of
dispute resolution and mechanisms to resolve disputes resulting from claims.
Geographic constraint is considered as another limitation. The research was
limited to the United Arab Emirates construction market only. It would have been
better enhanced had it covered the Middle East and other GCC countries in a broader
context.
6.4 Recommendations for Future Research

It would be recommended for future researchers to approach the topic of claims
and claims management from a two way approach rather than a single approach. The
first would be the contractual point of view and the other a managerial approach. This
hybrid approach would be useful along with the use of the quantitative method to
gather data relevant to the field by holding surveys involving all the stakeholders.
Another aspect which could be considered by researchers is to conduct this
study from a multi-aspect dimension. In other words, the research can be conducted to
include the perspectives of Employers and Engineers, in addition to the Contractors
perspective.

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APPENDICES
APPENDIX (A): Student Declaration Form

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APPENDIX (B): THE INTERVIEW QUESTIONS STRUCTURE

General Information Questions
1- Gender
Male
Female
2- Overall years of experience in the construction industry.

0 to 5 years
6 to 10 years
11 to 15 years
15 years and above
3- Total years of experience in UAE based construction projects.

0 to 5 years
6 to 10 years
11 to 15 years
15 years and above
4- Are you a holder of any international certificate(s) related to project

management?
5- What is the nature of the project you worked on?
6- Please specify your designation during your work in this project?
7- What is the international body used to administer the contract between the
Employer and your firm in this specific project?
8- Do you have direct involvement with the claims arising in your project?
Claims Management Questions
1- If you were to define a claim, what would be the most appropriate definition
you would put in words?
2- What are the various types of claims you have encountered in the projects
executed in UAE?
3- Have you ever attended any seminars or training sessions related to claims and
management of claims?
4- In this particular project what are the type of claims presented to the Employer?
5- Were claims used in your project used to cover any kind of delay resulting of
your organizations own delays?
6- For the formulation of claims, who are the team members usually relied on?

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7- If you were to set the rules for construction claims management systems, what
would you take into consideration?
8- Does your organization deal with claim specialists to assist in the formulation
and evaluation of your claims worth before presenting to the Employer?
9- What are the common errors which you have encountered in the presentation of
your companys claim?
10- What are the key factors to a successful claim presentation?
11- What are the lessons learnt from the current project?
12- What are the common mistakes your team or claims specialist usually fall into
where claims are concerned?
Questions related to Claims Substantiation
1- What are the essential components required for the proper substantiation of a
claim?
2- What is necessary to be done during the construction phases to make a claim
sufficiently substantiated?
3- Who do you consider the key team members who can contribute to the case
development and consequently successful claim presentation?
Questions Related to the Role of the Engineer and FIDIC
1- What is the role of the Engineer where claims are concerned?

2- Do you feel that the Engineer acts impartially with your demands as a
Contractor?
3- During the Engineers assessment of your claim, Is the Engineer practicing
fairness and integrity towards your entitlement?
4- Do you feel that FIDIC which is currently adopted in the UAE the suitable
form of contracts from a Contractors perspective?

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Record Keeping Questions
1- Whilst formulating the claim, what are the general documents you rely on to
properly furnish the claim?
2- Do you have a document control system implemented to document all
incoming and outgoing correspondence in the project?
3- Did you ever feel that there are setbacks for the system your organization is
implementing with regards to controlling the documents?
4- Do you find documents easily accessible when needed especially when these
documents are related to claims?
5- What are the most important documents needed for the proper substantiation of
claims?
Change and Change Management Questions
1- From your opinion to what extent do changes impact the costs borne by the
Employer and the contractor?
2- Which changes have more impact on projects delivery, the ones identified at
the initial stages of the ones during the implementation stages?
3- What are the main drivers for change occurrence?
4- As a construction professional how do you link the occurrence of change to the
formulation of a claim?
5- Do you feel that changes are always initiated by the Employer or the Engineer?
6- How did the project benefit/suffer of change and variation orders?
7- Did the claims in your project result in disputes, hostility or disagreement with
the Client?

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ID: 110159
Project
Director
APPENDIX (C) Project A Organization Chart

Project
Manager
Technical
Manager
Architects/
Structural
Draftsmen
QA/QC
Manager
Construction
Manager
QA/QC
inspectors
Document
Controller
Commercial
Manager
Planning
Manager
Secretary
QS Officers
Planning
Engineer
MEP Manager
Safety
Manager
Safety Officers
Plant
technicians
Steel Structure
engineers
Site Engineers
Project
Engineers
Electrical
Engineer
Mechanical
Engineer
Supervisors
Supervisors
Supervisors
Supervisors
Supervisors
Supervisors
Technical
Engineer
Foremen
Foremen
Foremen
Foremen
Foremen
Foremen
Draftsmen
Fabricators
Labour
Labour
Inspectors
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ID: 110159
Project
Director
APPENDIX (D) Project B Organization Chart

Project
Manager
QA/QC
Inspectors
Plant
technicians
Plant Engineer
Construction
Manager
Document
Controller
Commercial
Manager
Planning
Manager
Secretary
QS Officers
Planning
Engineer
Plant
technicians
Section
Engineers
Site Engineers
Project
Engineers
MEP Manager
Safety
Manager
Safety Officers
Electrical
Engineer
Mechanical
Engineer
Supervisors
Supervisors
Foremen
Foremen
Inspectors
Supervisors
Supervisors
Supervisors
Supervisors
Foremen
Foremen
Foremen
Foremen
120
Labour
Labour
Labour
Labour
Electricians
Mechanical
technicians
Dissertation
ID: 110159
Project
Director
APPENDIX (E) Project C Organization Chart

Project
Manager
Material
Engineer
Plant Manager
Lab
Technicians
Plant
technicians
Construction
Manager
Sr. Quantity
Surveyor
Contract
Manager
QA/QC
Manager
Asphalt
Engineers
Site Engineers
Surveyor
Engineer
Inspectors
Project
Engineers
Security
Supervisors
Housekeeping
Safety Officers
Supervisors
Supervisors
Supervisors
Field Surveyors
Machinery
operators
Planning
Engineer
QS Officers
Document
Controller
Plant
technicians
HSSE Manager
Draftsmen
Foremen
Foremen
Foremen
Cleaners
121
Helpers
Labour
Labour
Labour

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ID: 110159
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MSc Project Management